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Thank you for standing by, and welcome to the iQIYI first quarter 2026 earnings conference call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by number one on your telephone keypad. I would now like to hand the conference over to Ms. Chang You, IR Director of the company. Please go ahead.

Thank you, operator. Hello, everyone, and thank you for joining iQIYI's first quarter 2026 earnings conference call. The company's results were released earlier today and are available on the company's investor relations website at ir.iQIYI.com. On the call today are Mr. Yu Gong, our Founder, Director, and CEO, Ms. Ying Zeng, our Interim CFO, Mr. Xiaohui Wang, our Chief Content Officer, Mr. Youqiao Duan, Senior Vice President of our membership business, and Mr. Xianghua Yang, Senior Vice President of International and over online game business. Mr. Gong will give a brief overview of the company's business operations and highlights, followed by Ying, who will go through the financials. After the prepared remarks, the management team will participate in the Q&A session.

Before we proceed, please note that the discussion today will contain forward-looking statements made under the Safe Harbor Provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC. iQIYI does not undertake any obligation to update any forward-looking statement except as required under applicable law. I will now pass on to Mr. Gong. Please go ahead.

Hello, everyone. Thank you for joining us today. The convergence of breaking breakthrough AI and a supportive domestic regulatory landscape is fundamentally reshaping entertainment and creating incredible opportunities for iQIYI. Let me share iQIYI's value proposition in this new area from three perspectives. Reinforcing our core today, igniting new growth engines, and building for the long term. Let's start with the first perspective, reinforcing our core fundamental foundational strength. Premium content remains the cornerstone of our strategy. In Q1, we reaffirmed its compelling appeal for audiences. Our diverse lineup of hit dramas, including The Punishment 2, Fa Zui Er, Born to Be Alive, Sheng Shu, Pursuit of Jade, Zhu Yu, and How Dare You!?, Cheng He Ti Tong, secured our dominant position in the core drama category per Enlightent data.

Moving forward, our commitment to content quality is stronger than ever, designed to deliver expert experience that profoundly connect with viewers. This focus is revitalizing our core operations, evidenced by the sequential growth in membership revenue. We are also highly encouraged by the supportive domestic regulatory landscape, which is accelerating the content approval progress and driving stronger capital efficiency. Importantly, these regulatory policies are unlocking innovation across new formats. This includes short-form dramas, Zhong Ju. Typically, 15-25 minutes per episode with flexible episode counts and internet feature films, Wang Wo Gu Shi Pian, which are limited to three chapters of 60 minutes each. These formats are not only shorten production cycles and lower capital barriers, but also attract a broader pool of creative talent, enabling more innovative storytelling than traditional long-form content.

Furthermore, they are perfectly for AI, perfectly suited for AI integration, automatically enriching our portfolio and maximizing our ROI. Looking ahead, we plan to launch over 100 short-form dramas in 2026, while steadily building our internet feature film slate. By continually delivering premium long-form content while strategically expanding into new formats, we are reinforcing our foundational strengths. Importantly, this expansion is efficient, allowing us to capture new opportunities without putting additional pressure on our overall content costs. Second, we are igniting new growth engines. Among our emerging business segments, our overseas business has established it as a proven second growth driver. In Q1, overseas membership revenue surged by over 40% annually. This success stemmed from a highly differentiated market positioning compared to global peers. We focus on premium Asian content tailored primarily for young female demographics.

Within our Asian content portfolio, K-dramas, whose global influence continue to rise, serve as the key catalyst for our international expansion, complemented by our growing slate of local content. Geographically, we are anchoring our presence in Southeast Asia, while also expanding into high-growth markets in the Middle East and Latin America, with Brazil as a key focus. We are also deeply integrating AI across our global operations to drive efficiency. Parallel to our market expansion, we are maximizing IP value through our experience business, expanding our content value from online to offline, and extending the IP lifecycle. For IP-based consumer products, we are driving deeper user engagement through merchandising, while empowering popular IPs to generate both broadcasting window and long-tail monetization. Finally, our foraying into offline experience is yielding encouraging results.

Our first iQIYI Land in Yangzhou has garnered solid initial feedback, allowing us to rapidly accumulate operational experience to apply to other locations. Thirdly, we are laying a robust foundation for long-term growth, powered by AI and our decentralized platform. AI is breaking down the historic barrier that once made quality content costly, time-consuming, igniting explosive growth in both creators and content value. Anticipating that this accelerating shift will soon outgrow the traditional centralized media platform model. We have strategically pivoted to build an upgraded and vibrant decentralized social media ecosystem. This will unlock substantial value. A decentralized ecosystem greatly expands content supply, allowing us to meet diverse demand at a whole new scale.

Creators will have greater opportunities to brainstorm and succeed, retaining full ownership of their IP and converting it into real attractive returns, while also cultivating private traffic, building loyal fan base, and gathering valuable data from direct user interactions. Meanwhile, for iQIYI originals, we are sharpening our focus on premium content, while the decentralized planning flow drives scale. Our original will serve as our signature offerings. Additionally, we are building a comprehensive support system so creators can focus purely on creativity. One key pillar at Nadou Pro, iQIYI's proprietary platform for studio-grade content Nadou Pro is powered by both public and self-deployed large models, but it goes beyond generic models. It's built upon our years of technology infrastructure and deep content expertise.

We transform years of industry know-how into AI agent, and then combine them with our core IP and digital assets to deliver accessible platform Nadou Pro offers one-stop services from content creation to operations and commercial collaborations. Beyond Nadou Pro, we offer professional training and workspaces. We also facilitate financing solutions, connecting talent with capital from our own funds and external investor networks. Now, let's explore what defines iQIYI's long-term investment value and how we are uniquely positioned to lead in the AI era. Our confidence rests on two core pillars. First, on how to replicate competitive. We possess a unique blend of deep content expertise and a cutting-edge technology. We have a proven DNA of innovation from pioneering genre-specific theater brands to now leading the AIGC transformation in the industry. Crucially, we possess a vast high-quality IP library that is essential in the AI era.

Alongside a high engaged user base that we are committed to serving with excellence. Second, a long-term structural enhancement to our business economics. AI is poised to address major industry pain points, expanding our margins, and maximizing capital efficiency. At the same time, our decentralized platform will boost content diversity to capture a broader audience base, while iQIYI originals focus on crafting enduring premier IPs. Together, these initiatives fuel our diversified monetization system, expanding membership, advertising, and offline experiences, unlocking IP value across both domestic and global markets. Before we dive into Q1 details, I want to emphasize our core philosophy, the true power of technology is to empower humanity, not replace it. It will serve audiences with richer, deeply resonate content. It will empower creators to overcome human limitation, turning their boldest inspiration into reality with absolute efficiency and freedom.

Ultimately, it will elevate the entire industry, unlocking new avenues for growth and helping more creators, especially young talent, realize both their creative vision and commercial value. Let's move on to the detailed performance in Q1. Let's start with content. We are pioneering AI-driven storytelling and talent cultivation. In Q1, we unveiled Peter Paul and iQIYI AI Theater, featuring a suite of 16 titles across science fiction, thriller, wuxia, and fantasy genres, each running 11-20 minutes. Nadou Pro powered key production process from capture, design, and scene setting to storyboarding, demonstrating AI transformative potential in professional content creation. In terms of our long-form drama performance, The Punishment II became our second franchise with two seasons exceeding the 10,000 iQIYI popularity index. Pursuit of Jade also surpassed 10,000, while our in-house produced custom drama, How Dare You!?, exceeded 9,000.

Both Pursuit of Jade and How Dare You resonated strongly with young female audiences, further solidifying our connection with these key demographics. Furthermore, we secured our leadership in realistic and suspense genres. Born to Be Alive earned the highest Douban rating among all domestic drama releases in Q1. The Devil Between Us II, and our own suspense theater brand, was also well received by users. For variety shows, our in-house production, Wander Together, [Non-English content], topped Enlightent market share ranking for the first quarter. For animations, we expanded our offering with four key original titles. Among these, the long-running The Great Ruler, [Non-English content], continued to captivate audiences, and season two of How Dare You achieved a strong synergy with its drama series adaption.

For our micro dramas, original production contributed over half of revenue from this category in Q1. AIGC has emerged as a powerful driver for content releases. In Q1, we launched more than 3,000 AI-generated micro dramas, further enriching our offerings. Finally, for micro animation and AI native format, we are rapidly expanding our library, which feature over 14,000 titles as of quarter end, with viewership continuing to rise steadily. Next, let me share our Q2 content pipeline. Our drama serials lineup features a rich variety of titles, from historical epics to niche genres, including Echoes of a Thousand Moons, [Non-English content], Bloom Lion, Born with Luck, The Heir, [Non-English content], and Archives: The Nanyang Mystery, Nanyang Dang An.

Among the already released titles, Born with Luck gained wide popularity, driven by its innovative storytelling, combining comedy and mystery, and surpassed iQIYI popularity score of 10,000, becoming the third title to reach such mark this year. For films, our pipeline includes original online movies, The Same Trick, Zuiue, Wind of Death, Man Lizhi, and The Counterfeit, Wei Chao Zhong An. For licensed titles, we will release theatrical hits on our platform like Pegasus 3, featuring Shang, Awaking of Insects in Silence, Jing Zhe Wu Sheng, and The Blades of the Guardians, Biaoren, along with the online film, The Legend Hunter, Xiang Long Ju.

For variety shows, we will continue to captivate audience with established franchise, such as Fight House Season 6, Become a Farmer Season 4, The Rap of China 2026, and Yes I Do Season 6, Xi Huan Ni Wo Ye Shi. While launching new IP like Voice of the Youths, Chao Ren Qing Chun De He Chang. For micro dramas, we have a diverse slate schedule, including Perfect Match, Deng Duili, San Di Yu, Zhong Yi Ni, One Night Pearl, Bai Ye Wei Qing, Phoenix Rules, Ou Scan, Man Zha Chou Huang, and Spring Rain of Phoenix, Feng Ren. For animations and children's content, we will continue the long-running Against the Gods, Ni Tian Xie Shen, and then debut a localized adaptation of the BBC classic, [I'll Tell You With]. Now, turning to membership business.

Revenue growth sequentially, primarily driven by premium titles, including Pursuit of Jade, The Punishment 2, How Dare You!?, and The Devil Between Us. Operationally, our refined upselling strategies and value-driven membership options successfully encouraged users to extend their plans, driving a year-over-year increase in average subscription duration for monthly subscribers this quarter. Additionally, our high-tier V7 membership continued to scale, driven by a highly differentiated value proposition that features free express package. Moving on to advertising business. For brand ads, revenue contribution from targeted dramas recorded double-digit annual growth, with titles like Born to Be Alive, How Dare You!?, and Pursuit of Jade gained strong recognition from advertisers. Sector-wise, food and beverage, internet services, and e-commerce all achieved double-digit annual growth. We are expanding our advertising appeal across new content formats.

For example, we partner with leading advertisers to co-produce stream of content for micro dramas, creating new avenues for brand integration. On the technology front, AI continue to empower our advertising operations. We leverage Nadou Pro to produce marketing materials and combine AIGC capabilities with our IPs to generate high-quality ad content. During Q2, our focus will be on maximizing ad sales across premium variety shows, dramas, and traditional display ads. We're further enhancing monetization on large screens. Concurrently, we will continue to leverage AI to optimize advertising efficiency. For performance ads, the advertiser mix is healthier and more balanced. Revenue from small and mid-sized advertisers recorded strong annual growth with sustained improvements by sector. Internet services, e-commerce, and mini games delivered outstanding quarterly results. Additionally, monetization efficiency for micro drama improved as well. Measured by revenue per inventory unit increased by over 60% year-over-year.

For the rest of the year, our strategy for performance ad focus on four key areas. First, expanding our client base across high growth verticals, including internet services, short-form videos, mini-games, and AI tools. Second, capturing greater market share during peak window, such as major e-commerce festival. Third, enhancing monetization efficiency through AI-powered capabilities. Finally, tapping into additional ad budgets by harnessing a more diverse content ecosystem and upgraded ad placement system. Moving on to our business performance in regions outside of mainland China. Membership revenue increased by over 40% annually in Southeast Asia markets. Membership revenue from Indonesia grew by over 80% annually. Meanwhile, Portuguese and Spanish-speaking regions demonstrated robust growth, with membership revenue from Brazil and Mexico both grew by over 100% annually. Average daily subscribers reached a new high. The global influence of C-dramas continue to expand.

Notably, Pursuit of Jade lead last performance across multiple markets and secure top position on our international platform viewership rankings. It topped the Google Trends among all C-dramas broadcast during the same window in 15 markets, and set a record as the most searched Chinese drama on Google. Beyond C-dramas, we are scaling original local production to elevate the appeal of our content library, particularly in key Southeast Asia markets in Q1. Our first original Thailand show, Running Man Thailand, delivered exceptional results, setting multiple new records for variety shows on our international platform. Google Trends confirmed its position as the most popular paid variety show over the past three years, and the title earned strong recognition from advertisers. Meanwhile, our first original Indonesian drama is on track to premiere in Q2, marking a further step in our localization journey.

Our overseas micro drama business also gained momentum with growing revenue contribution fueled by both licensed and original content. Our original production pipeline consistently delivered new releases across multiple languages, including English, Thai, Korean, and Indonesian. Our experience business. We focus on two core areas: IP-based consumer products and iQIYI Land. For IP-based consumer products, our self-operated merchant apps deliver solid performance with collectible cards from Pursuit of Jade, setting a new sales record in this category. For offline experience business, our first iQIYI Land in Yangzhou performed in line with expectations and was highly acclaimed for its scenery design, immersive experiences, and technology-enabled interactions. Going forward, we will continue refining operations and introducing new creative offerings to encourage repeat visits and on-site consumption.

Furthermore, we are leveraging our experience gained in Yangzhou to drive through development of new location in Kaifeng and Beijing, which are progressing smoothly. Now, I would like to hand it to Ying for the financials. Thank you.

Thanks, Mr. Gong, and hello, everyone. Let me walk you through the key numbers for Q1. Total revenues were RMB 6.2 billion, down 8% sequentially. Membership services revenue reached RMB 4.2 billion, up 2% sequentially, driven primarily by our diverse lineup of hit dramas. Online advertising revenue was RMB 1.2 billion, down 8% sequentially, primarily due to seasonality. Content distribution revenue reached RMB 358.7 million, down 54% sequentially, primarily because less number of dramas we distribute to third parties. Other revenues were RMB 426.7 million, down 22% sequentially. Moving on to costs and expenses. We adopted a disciplined strategy in Q1. Content cost was RMB 3.7 billion, down 2% sequentially. Total operating expenses were RMB 1.2 billion, down 10% sequentially.

Moving on to cash flow. Net cash provided by operating activities were RMB 186 million, reflecting some encouraging early signs in financial performance driven by our new business initiatives. Turning to bottom line and cash balance. Non-GAAP operating loss was RMB 149 million, and the non-GAAP operating loss margin was approximately 2%. As of the end of Q1, we had cash equivalents, restricted cash, short-term investments and long-term restricted cash, including prepayments and other assets at a total of RMB 4 billion. The sequential decrease in cash balance was primarily due to the repurchase of our 6.5% convertible senior notes due 2028, which reduced our outstanding debt, further strengthening our capital structure.

At quarter end, the company had a loan of $636.6 million to PAG, recorded under the line item of prepayments and other assets. We remain committed to delivering shareholder value over the long run. In March, we announced a proposed listing on the main board of the Hong Kong Stock Exchange and our first share repurchase program of up to $100 million effective through September 2027. Up to now, we have repurchased a total of approximately 6.45 million ADSs for a total cost of $8 million. For detailed financial data, please refer to our press release on our IR website. I will open the floor for Q&A.

Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. We ask that you please ask your question in Chinese first, and then translate the question into English. In the interest of time, please limit to one question per person. If you would like to ask further questions, you may press star one again to rejoin the queue. Your first question comes from Xueqing Zhang with CICC. Please go ahead.

[Non-English content]. Thank management for taking my question. My question about Nadou Pro. The company previously launched Nadou Pro, an AI agent for film and television content creation. Could management share more details about the recent progress of Nadou Pro and any specific examples of its practical applications? In addition, how does management view the future commercialization prospects for Nadou Pro? Thank you.

[Non-English content]

The CEO Gong Yu is taking this question. Nadou Pro is iQIYI's proprietary platform for studio-grade con-production. It is powered by public large models, but it goes beyond generic models. It's actually built upon our years of tech infrastructure and deep content expertise. For example, we have transformed years of industry know-hows from key areas such as screenwriting, filming, and post-production into AI agents and combined them with our core IP and digital assets to deliver accessible platform capabilities. Creator tools previously used only within iQIYI, such as the script evaluation and shot-based reference search, have now been incorporated to Nadou Pro.

[Non-English content]

Nadou Pro has been available to all creators across the industry since April 20th. We now currently have over 10,000 active creators on board, ranging from traditional pro-production companies to independent creators.

[Non-English content]

Content productions cover a wide variety of formats including the long-form dramas, micro dramas, micro animation, and short videos, also for some commercial, ad content.

[Non-English content]

Among which, about 100 of them are, iQIYI original titles, projects.

[Non-English content]

Nadou Pro actually recently launched a creator community as a platform for creators to interchange experiences and form some feedbacks and that will feed internal development for the upgrades in the coming up versions. This platform will feature some commercial matchmaking features upcoming next. These will empower the creators with the full cycles from content creation to commercial monetization.

[Non-English content]

In addition, the international version of Nadou Pro is in development and will be online soon.

[Non-English content]

Regarding Nadou Pro's commercial prospect, it will serve as a standalone product to boost actually monetization capabilities. It will continue to reiterate and continue to improve the development and also to roll out upgraded version to create more better features.

[Non-English content]

Thank you.

Thank you. Your phone comes from Vicky Wei, Citi please.

[Non-English content]

Thanks management for taking my question. Will management share some latest progress about the industry anti-piracy updates? Thank you.

Thanks, Vicky. We'll invite, our Chief Content Officer, Wang Xiaohui, to take this question. Please go ahead.

[Non-English content]

For the anti-piracy situation, we actually have observed very positive progress. Around the end of April and early May, the National Radio and Television Administration launched a targeted campaign to crack down on the pirated distribution of drama content across illegal websites, browsers, search engines, and cloud storage services. The industry regulators actually attach great importance to this issue and have established clear requirements for the prevention and handling of online copyright infringement, including some of the initiatives.

[Non-English content]

To give us, give you guys some examples. For example, we established a rapid response mechanism for infringement content, enabling real-time communication between copyright owners and platforms to ensure swift response and removal.

[Non-English content]

Second, the new policies and regulations actually enforce dual responsibilities for platforms and local authorities, requiring provincial and municipal bureaus to fulfill their local management duties. For example, enhancing monitoring and improve processing efficiency. The platforms must resolve and remove infringing content within 24 hours of receiving a report or notice. For newly released dramas, hit series, or key titles, the removal must be completed within four hours.

[Non-English content]

Third, building a coordinated enforcement mechanism, regularly reporting on infringement status, takedown rates, and typical cases. For repeat offenders who will be publicly named and handed over to copyright and police authorities for investigation and prosecution.

[Non-English content]

This targeted campaign will be integrated with routine regulatory enforcement. Looking ahead, the National Copyright Administration's Sword Net 2026 anti-piracy special campaign has designated online copyright infringement and piracy as its top priority, signaling even stricter enforcement measures.

[Non-English content]

Currently, we're happy to see the efficiency of handling infringement has improved significantly. We believe the piracy issue will be substantially mitigated in the future. We believe strong copyright protection safeguards the commercial interests of all industry stakeholders, boosts the willingness to invest in high quality content creation, and foster a virtuous cycle of content supply. For iQIYI, we will continue to upgrade our technology and operational mechanism to co-build a healthy copyright ecosystem, ultimately helping to drive user growth and revenue of our long form video business. Thank you.

Thank you. Your next question comes from Jenny Yuan with UBS. Please go ahead.

[Non-English content] Let me translate myself. Membership business saw sequential recovery in the first quarter. In particular, overseas business delivered a robust growth momentum. How does management view the sustainability of this improving trend? How should we think about the membership business outlook into second quarter and beyond? Thank you.

Thank Jenny. We'll invite the Senior Vice President of Membership business to take on this question. Go ahead, please.

[Non-English content]

In Q1, driven by a strong slate of premium content and refined operational strategies, membership revenue delivered sequential growth in the first quarter.

[Non-English content]

We have a rich content pipeline for Q2. A number of recently launched titles actually have performed well. Noticeably, Born with Luck surpassed 10,000 on iQIYI popularity index, powered by a distinct suspense but comedy narrative style. In addition, we have also an expanded slate for the second quarter, including the long-form dramas, for example, Echoes of a Thousand Moons, The Epic of Milu, The Heir, for variety shows, we have Hahahahaha Season 6, Become a Farmer Season 4. We believe these content will effectively reach a broad membership base.

[Non-English content]

Looking ahead, for Q2, we are looking at our operations and the sales priorities. For example, we're focusing on reactivating dormant members, optimizing variety show schedules to offer more content for members, and expanding large screen membership via joint operating initiatives with smart TV manufacturers. Also leveraging the June 18 E-commerce Festival to boost annual and bundled memberships. Together, we believe these efforts will expand our subscriber base and expand subscription cycles.

[Non-English content]

Looking ahead, as the stability and consistency of our premium content pipeline continues to strengthen, and coupled with our ongoing optimization of our membership operations, we believe our membership business will maintain a steady development trajectory. Thank you.

Thank you. Your next question comes from Thomas Chong with Jefferies. Please go ahead.

[Non-English content] Thanks management for taking my question. Congratulations on the fast growth of your overseas business. Just now, we talk about the fast growth in Southeast Asia. May I ask about our investment strategies in Southeast Asia market? Also, can you share about some of the differences or similarities in terms of the audience preference in domestic versus overseas? Thank you.

Thank you, Thomas. We'll invite our Senior Vice President of our global overseas business, Mr. Xianghua to take on this question. Please go ahead.

[Non-English content]

Okay, well, I will take this part in two segments. First, for the key markets. Currently our key markets are performing pretty well. For the Southeast Asia market have been growing quickly. For the market that's crucial for our Southeast Asia will continue to invest in countries such as Thailand, Indonesia, Malaysia, Vietnam, and Philippines. Now also for some of the emerging markets that's been also growing pretty well. For example, North America, Brazil, etc. We'll continue to invest in these areas and markets.

[Non-English content]

Let's start with content. For us, our key differentiation is our C-drama. That will continue to be our key in terms of getting users and especially for these content that's favorable and liked by young female users. In key areas that I mentioned earlier that will increase the promotional activities and marketing activities for these markets. For example, for user growth, using content to attract and also to retain users. For local content that will control and also have a good pace in terms of the content investment. Also in terms of the volume that we're investing into the local content. We also focus for the young female users like genre and content for local production.

[Non-English content]

For a third, for our matured markets, we'll continue to cooperate with telecom carriers and also e-commerce platforms to increase our membership scale. We will continue to use this strategy to replicate it to other markets that we're trying to explore. Thank you.

[Non-English content]

In terms of the user demographics for overseas audiences, is majority are focusing on the young female user who are under 40 years old.

[Non-English content]

For the user behaviors, for overseas market, each major market is a bit different. Some of them have higher user, you know, subscription cycles, better cycles, better retention than others. Overall speaking, the ARPU for overseas memberships are higher than the domestic ones.

[Non-English content]

Thank you.

Thank you. Your next question comes from Gigi Zhou with Guangfa. Go ahead.

[Non-English content] I will translate the question myself. Seeing iQIYI's efforts in Nadou Pro and fostering AI-driven creation and talent cultivation, how do we view the competitive landscape in the AI era? Thank you.

We'll have the CEO Gong Yu to take this question. Please go ahead.

[Non-English content]

For long, long-form video, we in the past, our challenge has been the investment scale or the amount that we invest in content is massive. The content cost is high, which means the investment risk is high, which leads to less number of titles that's been invested and rolled out for the industry. For any content that we invested, we typically focus on the premium head content. That was the cycle that we faced and the challenge we faced. For AI, it actually fundamentally improves this situation. Under the AI model, you know, the content cost is much cheaper.

The production cycle and production period is shorter, which means there are more titles, more number of titles will be rolled out and introduced in this industry. Because there are more content, there are more choices for users to enjoy. User scale will increase under the new AI model. Overall speaking, we think it's greatly beneficial for long-term video to improve its business fundamentals and economics, and also to attract more users to the platform.

[Non-English content]

To better accommodate this industry trend, you know, we built a number of initiatives. For example, the Nadou Pro we discussed and also the iQIYI account, which means the users can upload their content to our platform. Under the revenue share model, they will have the opportunity to introduce their content to more users to enjoy and to increase their revenue performance and also monetization capabilities. Under this whole backdrop, we believe the content cost will be lower and the number of video content will be increased.

[Non-English content]

If we look back for the past 10 years of the internet, and especially for short-form video and also micro drama in the recent years, we believe that technology is the fundamental driver in terms of the in-industry boom and industry development. We think, you know, under this AI era, we think it becomes a great opportunity for the long-form video to have better economics and better industry dynamics.

[Non-English content]

Thank you.

Thank you. There are no further questions at this time. I'll now hand back to the company for closing remarks.

Thank you, everyone, for participating on the call today. If you have further questions, don't hesitate to contact us. Thank you.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.

Thank you for standing by, and welcome to the iQIYI Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to Ms. Chang You, IR Director of the company. Please go ahead.

Thank you, operator. Hello, everyone, and thank you for joining iQIYI's Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. The company's results were released earlier today and are available on the company's Investor Relations website at ir.iqiyi.com. On the call today are Mr. Yu Gong, our Founder, Director and CEO; Ms. Ying Zeng, our Interim CFO; Mr. Xiaohui Wang, our Chief Content Officer; Mr. Youqiao Duan, Senior Vice President of our Membership Business; Mr. Xianghua Yang, Senior Vice President of International and Online Game Business; and Mr. Gang Wu, Senior Vice President of Brand Advertising Business. Mr. Wong will give a brief overview of the company's business operations and highlights, followed by Ying, who will go through the financials. After the prepared remarks, the management team will participate in the Q&A session. Before we proceed, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC. iQIYI does not undertake any obligation to update any forward-looking statements, except as required under applicable law. I will now pass on to Mr. Gong. Please go ahead.

Hello, everyone, and thank you for joining us today. In 2025, we focused on strengthening our core business to renew growth while achieving advancements in emerging businesses. These efforts drove a solid year-end performance with total revenue in Q4 returned to growth both annually and sequentially. Notably, our long-form dramas secured #1 in viewership market share on Enlightent data annual rankings with 5 titles exceeding 10,000 for the iQIYI popularity score. More importantly, we made remarkable breakthroughs in IP franchise development, moving beyond making individual hit titles to building evergreen IPs that drive growth across diverse formats. Strange Tales of Tang Dynasty stand as a stellar example as a flagship IP with 4 consecutive blockbuster seasons. It's influence has expanded from long to short and micro dramas as well as off-line experience. Our advertising businesses continue to demonstrate strong growth potential. Our overseas business has evolved into a sustainable and scalable second growth engine powered by accelerated organic momentum. In 2025, membership services revenue increased by over 30% year-over-year with growth accelerating to 40% in the second half of the year. The subscriber base reached an all-time high. At the same time, our experience business has entered a critical stage of development. For IP-based consumer products, we have built a dedicated in-house team and upgraded from a listening-only approach to a dual-track model, combining self-operated mechanism merchandise with licensing. This strategic shift strengthened our control our IP operation and amplifies monetization efficiency. On the offline experience front, we launched our first iQIYI LAND in Yangzhou on February 8, 2026, receiving positive initial reception. Two additional parks scheduled to open later this year. 2026 marks a key step towards scaled development as we build the experience business into a new engine for long-term value creation. Now let's dive into the details of our business performance in Q4. Starting with content, the cornerstone of our business. For long-form dramas, we secured the #1 viewership market share for Enlightent data driven by a robust slate of premium content and breakthroughs in serialized IPs that boost engagement and commercial results. Strange Tales of Tang Dynasty 3: To Changan marked our first title with 2 seasons exceeding a popularity score of 10,000. Among 2025 new releases, it ranked #1 in ad revenue and #2 in membership revenue. Following this momentum, the crime drama, The Punishment 2 further became the first title of 2026 to surpass 10,000 for the popularity score. It is also our second franchise with 2 seasons achieving this milestone. Shifting to movies, we maintained a diverse lineup with broad demographic appeal. For iQIYI originals, the summer's theatrical hit, The Shadow's Edge Bufeng Zhui Ying extended its offline success to the online demand. It not only topped all Q4 film releases by peak iQIYI Popularity Index score, but also became the highest rated domestic action crime film of the past decade on Douban. Additionally, our original online film, The Sixth Robber Yun Chao Da Jie An set a new all-time high for the popularity score within its category. For movies broadcasted on our platform, we retained the #1 viewership market share for 16 consecutive quarters. In Q4, we rolled out diversified titles, including The Warm Seat, That Two Lives [Foreign Language], The Animated Feature, Nobody, Lang Lang Shan Xiao Yao Guai; The Fantasy comedy, The Adventure [Foreign Language] and the female-oriented feature Flew Away [Foreign Language]. Furthermore, our innovative revenue sharing model designed to optimize returns for films with limited theatrical box office performance gained further traction. The Return of the Lame Hero, Bi Zhengming de Zhengming generated RMB 36 million in revenue -- in shared revenue, ranking first among all titles under this model. Turning to variety show, our dual focus on long-running franchise and fresh innovative IPs show market-leading performance in 2025. According to Enlightent data, 3 of our multi-season titles ranked in the top 10 most watched multi-season variety shows and 2 new releases ranked in the top 3 most watched new shows. Our originals continue to set benchmark. The Rap of China ranked its ninth season this year, cementing its position as China's longest running online variety IP. Additionally, Hi! Young Farmers 3, a spin of the developed beloved Become a Farmer franchise, featuring the boy group, reached an all-time high in its popularity score this season. Among brand-new originals, Wander Together Yuzhou shanshuo qing zhuyi exceeded 8,300 for popularity score. We also expanded IP values through merchandise partnerships with brands for Hi! Young Farmers 3, The Blooming Journey 2, Yilu Fanhua and Wander Together unlocking new revenue potential. Turning to micro dramas. We have expanded free content to over 70% of our 20,000 title library to broaden engagement. Our original portfolio is scaling to over 150 titles today, fueling record high membership and distribution revenues in Q4 from these offerings. Spin-off from Strange Tales of Tang Dynasty, The Chinese Detective [Foreign Language] and The Light On library [Foreign Language] both hit new highs for popularity school. Notably, over 70% of their debut viewers also watched the long-form serials, helping to extend the IP's life span. These releases not only boosted membership views, but also attracted top-tier brand partnership, moving well beyond the conventional performance ad model. Building on the momentum of the premium micro dramas, we are working into micro animations and business model centered on free content with a pipeline of over 10,000 titles in place, micro animation viewership and the time spent are growing rapidly. Beyond content, we further amplified our IP value from flagship marketing events. In December 2025, we hosted the annual iQIYI Scream Night, alongside a 2 days iQIYI Scream Carnival in Macau to honor the year's standout productions and talents. The event drew over 200 million on-site attendees and live stream viewers and brought together around 300 celebrities and industry partners. Next, let's dive into our 2026 content strategy and the exciting Q1 lineup. Starting with dramas, our Q1 slate includes between Love Between Lines, Da Xi, Swords into Plowshares, Tai Ping Nian, Born to Be Alive, Sheng Ming Shu, How Dare You, Cheng He Ti Tong, The Devil Between Us, Chu E, Our Dazzling Days, Sui Yue You Qing Shi, Pursuit of Jade, Zhu Yu and Love After You Yang, Zhong Qi Chu Nai For movies, we will meet audience demand with a diverse slate spanning top theatrical releases off and online movies. Q1 lineup features original online movies such as Northeastern Brother Season 3, Dong Bei Yong Ge and The Sing City [Foreign Language] alongside licensed titles such as [Foreign Language]. For variety shows, we are enhancing the long-term operation of multi-season IPs while exploring fresh and innovative new IPs. Key Q1 releases include Five Hearts Season 6, Wu Xi; Hit Song Season 2, You Ge; as well as new IPs such as Wonders Gather and Tonight Comedy Show, Jin Ye Xi You Xiu. For micro dramas, we will focus on creating original content with quality and innovation while enhancing operations, commercialization and deepening integration of AI. Q1 key titles include Return to a Better Tomorrow, Xin Yingxiong Bense; The Address of a False Noble Woman [Foreign Language] and The Amber hour [Foreign Language]. For animations, we will meaningfully expand our lineup of original Chinese animation compared with previous years. In Q1, our slate features original long-running series such as The Great Ruler, Da Zhuzai and Against the Gods Nitian Xieshen as well as popular IP, including How Dare You Season 2 and Ways of Crisis [Foreign Language]. For children's content, we will secure top-tier SSIPs, scale and original production and expand our AI-driven portfolio. In Q1, key offerings include a brand-new original title, Detective Baboo [Foreign Language] alongside licensed show such as PAW Patrol Season 11 Wangwang dui li dagong and the latest season of Pleasant Goat and Big Big Wolf Xi Yangyang Yu Hui Tailang. Moving on to the membership services. Over the past few quarters, our membership services revenue has shown consistent year-over-year recovery driven by diverse premium offerings. In Q4, members enjoyed the popular titles such as Strange Tales of Tang Dynasty 3: To Changan; Silent Honor, Chen Mo De Rong Yao; Fated Hearts, Yixiao Suige; Legend of the Magnate, Da Sheng Yi Ren, and Sword and Beloved, Tian di Jian Xin. We will revitalized our membership business through a range of operational initiatives. For example, we boosted new subscriptions and upgrades to the S-Diamond plan by offering inclusive products such as free Express package, which provided early access to families at no extra cost. In 2025, Express package were available for over 40 dramas. Additionally, we are strengthening member retention by emphasizing annual memberships during holiday promotions, e-commerce festivals and bundled partnership offers. To further increase the value of memberships, we introduced additional exclusive benefits, including 5 VIP events in the first quarter, featuring participation in offline show recordings, advanced screenings and the exciting iQIYI Scream Night. In particular, iQIYI Scream Night event was highly praised for exclusive perks like red carpet viewing privilege and live feed featuring their favorite celebrities. Moving on to advertising business. In Q4, brand advertising revenue growth both annually and sequentially, ad revenues from variety shows and our dramas both delivered double-digit annual growth, while core ad verticals such as food and beverage, Internet services and e-commerce and telecom services all recorded double-digit annual growth. Beyond long-form videos, our micro dramas and micro variety shows are gaining considerable attention from brand advertisers. For micro dramas, we have successfully engaged several renowned brands in 2025 through tailored content bundled sales that integrates product placements with theater branding and a string of collaborations. Likewise, our micro variety shows have received a strong market recognition, fostering long-term partnerships with multiple clients and driving impressive revenue growth. For commercial ads, we regained sequential revenue growth in Q4, driven by a healthier and more balanced advertiser portfolio. Revenue from small and midsized advertisers grew both annually and sequentially. By vertical, Internet services, e-commerce and financial services led growth. Additionally, we have deployed a proprietary large AI model for scaled ad delivery, leveraging deep thematic understanding that has boosted commercial rates. Moving on to technology. We introduced Nado Pro, our proprietary AI agent platform designed to revolutionize professional content creation by integrating leading global large models with iQIYI deep expertise in professional content production. Nado Pro efficient -- effectively streamlines the production pipeline from script evaluation to final generation. Currently in its close beta phase, Nado Pro is empowering our internal teams and select partners in a wide variety of professional content such as feature films, dramas, animation. In addition, Taodou World, our pioneering AI agent-based NPC platform continues to redefine entertainment experience. Users can now engage with over 1,700 NPC agents from our popular titles Song, Dialogue, Fan Fiction and Virtual Social Interaction. The platform creates powerful synergies with key content, delivers immersive emotion, connection with fans and extends the long-term value of our IP. Strong user adoption is translating into commercial success and revenue from Total War raising sharply year-over-year in 2025. In addition to pushing the boundaries of AI applications, we are leading the industry with cutting-edge virtual production technology. Our in-house developed IQ Stage system has meaningfully enhanced the efficiency of vehicle scene shots for the theatrical hit Pegasus 3, featuring Shen Teng. This achievement delivered unparalleled results with zero frame drops and zero aliasing representing the highest standard for virtual production in car scenes in China. At iQIYI innovation is at the core of everything we do with a portfolio of over 12,000 patent applications. We are proud to rank #72 among the top 100 Chinese enterprises for valid invention patents. In 2025 alone, we filed nearly 1,000 new patent applications, most of them driving achievements in AI across content development, production, broadcasting and offline experiences. Moving on to the business performance in regions outside of Mainland China. In Q4, we continue to deliver robust growth with membership revenue increasing by 40% annually. Markets such as Brazil, Mexico and Indonesia showed exceptional performance with membership revenue surging by over 80% annually. Our strong performance is driven by the growing popularity of our C-dramas, which have shown substantial annual revenue growth. Notably, Speed and Love, Shuang Gui was a standout hit in 2025, emerging as the best-performing the C-drama during the peak viewing period and toping popularity chart in 14 markets on our international platform. It performed exceptionally well in key regions like Thailand, Malaysia and Singapore, where it leads its category on Google Trends. Its success extended further with the spin-off variety, which became one of the most popular Chinese variety shows on our overseas platform this year. We are also ramping up production of local original content with strong user reception. The original Oops! I'm in Jail stood out as the top Taiwanese drama on our platform in 2025. Moreover, our Thai original variety show Running Man Thailand launched in February 2026 has secured exceptional brand advertising partnerships. Apart from long-form content, micro dramas captivated increased engagement among overseas audiences in Q4. Membership revenue from micro drama hit a new high, driven by originals such as Spring in the Palace and Wild Scene and licensed hits from China like Midsummer's Vendela. Our efforts in creating local original micro dramas have also started to show results with 5 titles premiered in December 2025, featuring local content for South Korea, Thailand, the U.K. and Indonesia. Among these, the Korean micro drama, Darling, Is It All Coincidence and the Thai micro drama, Catch Me If You Love Me have outperformed gaining notable popularity across and beyond our platform. In addition to content in Q4, we held 4 major offline marketing events in Thailand, Indonesia, Malaysia and Singapore featuring Chinese celebrities. This event amplifies the influence of our content and the commercial value of our platform, forged stronger partnerships and propelled the global reach of Chinese content. Moving on to Enterprise business -- moving on to experience business. While we are focusing on 2 core areas, IP-based consumer products and iQIYI LAND by leveraging our extensive IP assets, we aim to build a new engine for sustainable long-term growth. For IP-based consumer products, our self-operated merchandise demonstrated solid progress, highlighted by top-selling collectible cards from premium dramas like The Journey of Legend. For IP licensing, Strange Tales of Tang Dynasty 3: To Changan secured strong partnerships across food and beverage, beauty and outdoors. And Sword and Beloved set new sales records during its broadcast period. Looking ahead to 2026, we plan to grow our IP licensing business and expand our self-operated merchandise beyond collective cards to more categories. For iQIYI LAND, we adopt a light asset model by combining AI and XR technology with IPs. We create immersive experiences that are more efficient, flexible and require less space and investment than traditional theme park. Our first iQIYI LAND was successfully opened in Ganzhou on February 8. Our Kaifeng and Beijing locations are set to open later this year each incorporating unique local elements to deliver tailored experiences. Revenue will primarily come from ticket sales and on-site spending. Looking ahead, we aim to position iQIYI Land as a key sales channel for IP-based consumer products and a vital platform for maximizing the long-term value of our IP portfolio. In summary, in 2026, we will focus on 3 key strategic goals. First, we will strengthen our domestic core by enhancing the quality of original content, strengthening membership and advertising businesses. Second, we will aim to sustain strong growth in our overseas and experience business, building more robust engines for long-term expansion. Third, over the past several months, rapid advancements in AI large models worldwide has revealed a clear insight. The content production industry will be revolutionized within the next 1, 2, 3 years. This transformation will significantly cut production costs, lower barriers to professional content creation and boost both the quality and the quality content. This exciting changes will greatly benefit media platform, especially iQIYI. To seize this opportunity, we are dedicated to building a dynamic AIGC ecosystem and transitioning our platform from a centralized to a decentralized model. We look forward to sharing detailed initiatives at our upcoming iQIYI World Conference on April. Now let me hand it over to Ying Zeng for the financials.

Thanks, Mr. Gong, and hello, everyone. Let me walk you through the key numbers for Q4. Total revenues for Q4 were RMB 6.8 billion, up 2% sequentially. Membership services revenue reached RMB 4.1 billion, down 3% sequentially due to seasonality. Online advertising revenue was RMB 1.4 billion, up 9% sequentially, primarily driven by the streaming content and e-commerce Double 11 campaign. Content distribution revenue reached RMB 787.7 million, up 22% sequentially, primarily driven by the increase in cash transactions. Other revenues were RMB 547.9 million, down 6% sequentially. Moving on to cost and expenses. Content cost was RMB 3.8 billion, down 5% sequentially as we adopt a more curated content acquisition strategy centered on quality. Total operating expenses were RMB 1.4 billion, up 2% sequentially. Turning to profit and cash balance. Non-GAAP operating income was RMB 143.5 million. Non-GAAP operating income margin was 2%. As of the end of Q4, we had cash, cash equivalents, restricted cash, short-term investments and long-term restricted cash included in prepayments and other assets at a total of RMB 4.7 billion. At quarter end, the company had a loan of USD 636.6 million to PAG recorded under the line item of prepayments and other assets. For detailed financial data, please refer to our press release on our IR website. Now I will open the floor for Q&A.

Your first question comes from Xueqing Zhang with CICC.

[Foreign Language] With recent upgrades in AI video generation models like Seedance, which are approaching production level quality. Could management share your view on how these advancements may impact iQIYI's business, particularly in content production and cost structure. What's your plan on leveraging AI video generation models?

[Foreign Language]

Our CEO, Mr. Gong is taking this question. Video generation models will substantially reduce the cost of producing long-form videos, shorter production time and lower the barrier to creation. This potentially will attract more new creators to this business and ultimately lead to more creations for the long-form video production. And this is very much beneficial to long-form video platforms like iQIYI, which means this will lead to increase in both the quantity and quality of long-form video content.

[Foreign Language]

Let me just discuss the impact of AI generation content for each content genres. For example, the micro animation is actually an AI-native content created entirely by AI. And for children's animation and also micro dramas, it has been demonstrated that large models can produce this content and reducing the production cost to 1/10 or less compared to traditional methods. For online films, animation and documentary, et cetera, these are rapidly permitted by AI-led production approaches as well. Among all these long-form video content, the most difficult ones to produce are the live-action content, for example, the theatrical films, drama series and variety shows. And in fact, these content have in part adopted AI in their production process and which the results have proven that these have significantly reduced the content cost -- content production cost. And based on our projections and estimations that we think the AI-led commercial film probably will emerge within the next 2 to 3 years.

[Foreign Language]

For iQIYI, we are actually placing our focuses on 2 areas to embrace these AI initiatives. On one hand, we have developed a Nado Pro an industry-specific AI agent for video content production. And on the other hand, we are working to build a new AIGC content ecosystem through various operation methods. Hopefully, that we can attract more creative talent under this new AI era.

Your next question comes from Maggie Ye with CLSA.

[Foreign Language] Can management walk us through company's content strategy for 2026 in more details? For example, how are we thinking about the key priorities across different genres, including drama, variety shows, film and micro drama, et cetera? And how are you thinking about the mix of self-produced content versus licensed one?

Thank you, Maggie. We will invite our Chief Content Officer, Mr. Xiaohui, to take this question.

[Foreign Language]

Given the current volume of in production dramas, we will slightly reduce the number of dramas to be produced in 2026 and place greater emphasis on top-tier titles in terms of their quality.

[Foreign Language]

In terms of the realistic and suspense and crime genres and these content categories have been iQIYI's strength in fact. And in these areas, we'll continue to maintain our innovation to create new content and more creative content and then maintain our advantage in these areas.

[Foreign Language]

Starting in 2025, we have increased the supply of female-oriented content. For example, starting from the end of 2025, we started to roll out a new variety show called Winter Together. This is targeting for the new female users and also that the beginning of 2026, we also launched a female-oriented -- a young female-oriented drama called How Dare You.

[Foreign Language]

For young male users, we have released multiple original animations this year, including the long-running series The Great Ruler, How Dare You Season 2 and a Way of choices.

[Foreign Language]

With the support of new regulatory policies, we will step up exploration of innovative content, for example, the short-form drama series.

[Foreign Language]

We recently introduced a unified revenue sharing policy across 8 major content categories, including dramas and films. And under this new framework, production partners return actually will be more directly linked to each title's revenue contribution and allowing outstanding work to earn higher returns.

[Foreign Language]

Apart from the content category, for example, like theatrical films and drama series, like Mr. Gong mentioned earlier, we are actually gradually adopting and actually very proactively adopting AI-led production for categories such as micro animation, animation and micro dramas, while we're applying AI across other content categories to cut cost and also accelerate time line.

Your next question comes from Lincoln Kong with Goldman Sachs.

[Foreign Language] My question is about the overseas business. How is our plan and strategy for 2026?

Thank you, Lincoln. We'll invite our Senior Vice President of International Business, Mr. Xianghua Yang to take this question. Please go ahead.

[Foreign Language]

In 2025, membership revenue grew by over 30%, with annual growth rate actually accelerating to 40% in the second half of the year. 2025 marked our highest growth rate year since the overseas business entered a stable operating phase.

[Foreign Language]

For 2026, our strategy is to sustain high revenue growth rate or even accelerate our growth rate.

[Foreign Language]

In terms of the content strategy, our market tailored content mixes actually have proven effective and continue to attract users. For C-dramas, they continue to expand their influence overseas. And the C-dramas will remain at the core of our overseas content portfolio, especially genres with strong cross-over appeal such as ancient costume, romance and contemporary romance.

[Foreign Language]

I am sorry, one more thing. Yes, go ahead.

[Foreign Language]

For content, we actually ramp up original production and local content licensing in Thailand, Malaysia and Indonesia. And in terms of operations, AI-powered translation and dubbing actually have significantly improved efficiency, reduced cost and accelerated the content release schedule. And going forward, we will fully leverage social media channels and use AI to generate promotional efforts, enabling low-cost, high-efficiency content distribution and user reach. Meanwhile, we will continue online and offline advertising to further amplifying the influence of C-drama. And last but not least, we will continue to promote content and strengthen our brand presence in international markets through initiatives such as celebrity sign-ups and also offline events.

Your next question comes from Rebecca Xu with Morgan Stanley.

[Foreign Language] My question is about iQIYI LAND. Could management share the operating performance of iQIYI LAND, Yangzhou since its opening. Also, can you please share the 2026 plan for this business?

Thank you, Rebecca. I will invite our CEO, Mr. Gong to take this question.

[Foreign Language]

Our very first iQIYI LAND actually opened in Yangzhou on February 8 and offers 7 core immersive experiences, including stage performances, multisensory theaters, interactive light and shadow spaces.

[Foreign Language]

The first iQIYI LAND opened about 20 days since its opening and during which also we experienced the Chinese New Year holidays. And actually, the performance and the feedback actually are meeting expectations, which can be reflected in the ratings on major OTA platforms. And the average points are 4.8 out of 5. And actually recently, the latest rating exceeded -- reached 4.9 for certain platforms.

[Foreign Language]

From the opening until now, the visitor numbers have continued to grow. And based on the actual operations, we observed that this experience really offered fun for all ages. We see participants ranging from children as young as 4 to 5 years old to seniors in their 60s and 70s.

[Foreign Language]

We are looking at the potential for a 1 to 2x increase in peak single day revenue during the following peak period. For Yangzhou location actually has its special areas and for the spring season, especially March and April is a peak travel season for Yangzhou. And also upcoming, we have the Labor holiday in May, the summer months of July and August and also the National Day holiday in October and all these key holidays and periods could potentially boost the revenue performance compared to the first 20 days.

[Foreign Language]

And the expected growth will come probably from 2 major areas from a more deeper operations to a more finer detailed operation for the entire iQIYI LAND and also the increased efficiency for iQIYI LAND as well.

[Foreign Language]

Currently, the average transaction value for consumer products at iQIYI LAND is about RMB 100. We think there's potential for growth in the future. We will try to load more products in the future and also to extend to other content categories as we do a more refined consumer product team operation.

[Foreign Language]

And for this year, we will focus more on the self-operated IP consumer products and the operations will be strengthened this year, and this will lead to a revenue potential growth of 100% this year.

Your next question comes from [indiscernible] with Guangfa.

[Foreign Language]

We'll invite our international business leader to take this question.

[Foreign Language]

In terms of our content, our brand or our slogan is beloved Asian content. So we focus not only Chinese content, but also the Asian content as well. Of course, Chinese content, which we call people or C-drama is our foundation because all the content has been already produced for our domestic business. So we only have to incur some of the dubbing and also translation, which is the cost with AI is much more efficient and controllable. But in addition to C-drama and also Chinese content, we also have, for example, Japanese animation, also Korean dramas and also the local content, for example, for the Thai region, Malaysia and also Indonesia. So this is how we set apart from many of the Western players in overseas. And for example, the Netflix and other houses, they host a lot of the Western content, whereas for us, we are the home of the beloved Asian content.

[Foreign Language]

Also, I want to add real quickly in terms of another content channel called micro drama. We actually -- this is something we rolled out end of last year. And in terms of the content viewing time contribution, micro drama already ranked us #2 content categories of the overseas platform and has been growing quickly and also very recently for the Chinese New Year, we have experienced rapid growth as well and reached a new high. So this is something else also that set us apart from the Western players in overseas market.

[Foreign Language]

And in terms of your question regarding ARPU and also membership performance. For ARPU actually for each region, it's actually different. Overall speaking, we think we're at the midrange of the price tier. For each different region, we expect a different price point. For areas more developed similar to the Western spending powers, the ARPU is a bit higher from the China domestic region. And for regions for the developing regions, for example, like the Southeast Asia, the average ARPU is a bit lower than the China domestic region. But overall speaking, I would say that the overseas ARPU will be greater or more than the China domestic ARPU.

[Foreign Language]

And in terms of the membership retention, in overseas business, we adopt the premium model, which is the free plus paid content model. And in areas such as more developed regions, I will say that this is very much similar to their spending habit and viewing habit, the retention is actually a bit better than domestic areas. But in some of the areas such as the developing regions, the retention performance is a bit lower. But overall speaking, the overall membership retention is similar to domestic level.

[Foreign Language]

In terms of we're adding the performance for the financial aspect. Overall speaking, the free cash flow now is positive. But in terms of the P&L performance for operating income because there is some financial accounting treatment that we still have to sort out. Now we haven't disclosed the exact numbers, but we will share more insights as we have more clarity.

There are no further questions at this time. I'll now hand back to management for closing remarks.

Thank you, everyone, for joining the call today. And if you have any further questions, please do not hesitate to contact us. Thank you.

Thank you. Bye-bye.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.