IQ

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. iQIYI (IQ) is back in focus after its August 18 earnings update. The company reported lower second quarter revenue of CNY 6,287.06 million and a wider net loss compared with the same period last year. See our latest analysis for iQIYI. Since the earnings release on 18 August 2026, iQIYI’s short term momentum has been weak, with the 7 day share price return down 21.85% and the year to date share price return down 48.03%, while the 1 year total shareholder return is down 57.11%. If this kind of earnings driven volatility has you looking beyond a single stock, it could be a good time to broaden your search with the 19 top founder-led companies After iQIYI’s sharp share price slide and fresh loss numbers, the choice is stark. Is this a moment to step in while sentiment is weak, or does the current valuation still leave room to wait for a clearer entry point? Against iQIYI’s last close at $1.06, the most followed valuation narrative points to a fair value of $1.54, using a 13.82% discount rate and explicit long term earnings assumptions. Read the complete narrative. Want to see what those margin and earnings assumptions actually look like? The narrative leans on future profitability, a higher profit multiple and tightly controlled share count. The exact mix of revenue, margins and discounting is where the story gets interesting. Result: Fair Value of $1.54 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, the iQIYI narrative still hinges on volatile membership and advertising revenue, as well as on consistently producing expensive hit content, which could keep margins and earnings under pressure. Find out about the key risks to this iQIYI narrative. With sentiment around iQIYI clearly mixed, this is a good time to review the data yourself and decide what really matters to you. To see what investors are optimistic about in the current setup, start by reviewing the 3 key rewards. If iQIYI has sharpened your curiosity, do not stop here. Casting a wider net now could help you spot opportunities that others overlook tomorrow. Target stability first and focus on resilient companies with strong financial footing through the solid balance sheet and fundamentals stocks screener (50 results) Hunt for value and seek out quality businesses that currently trade below their estimated worth using the 48 high quality undervalued stocks Pursue income potential and find companies offering robust yields with the 12 dividend fortresses This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include IQ. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

BEIJING, Aug. 18, 2026 (GLOBE NEWSWIRE) -- iQIYI, Inc. (Nasdaq: IQ) (“iQIYI” or the “Company”), a leading provider of online entertainment video services in China, today announced its unaudited financial results for the second quarter ended June 30, 2026. Second Quarter 2026 Highlights Total revenues were RMB6.29 billion (US$926.6 million1), decreasing 5% year over year. Operating loss was RMB104.8 million (US$15.4 million) and operating loss margin was 2%, compared to operating loss of RMB46.2 million and operating loss margin of 1% in the same period in 2025. Non-GAAP operating loss2 was RMB30.3 million (US$4.5 million) and non-GAAP operating loss margin was 0.5%, compared to non-GAAP operating income of RMB58.7 million and non-GAAP operating income margin of 1% in the same period in 2025. Net loss attributable to iQIYI was RMB287.5 million (US$42.4 million), compared to net loss attributable to iQIYI of RMB133.7 million in the same period in 2025. Non-GAAP net loss attributable to iQIYI2 was RMB209.7 million (US$30.9 million), compared to non-GAAP net income attributable to iQIYI of RMB14.7 million in the same period in 2025. “In the second quarter, we reinforced our content leadership and advanced our strategic transformation. According to Enlightent, we maintained the No. 1 domestic market share across long-form dramas, films, and children’s content during the quarter, while our short-form dramas claimed the top domestic market share for the first time in June,” commented Mr. Yu Gong, Founder, Director, and Chief Executive Officer of iQIYI. “The strategic transformation toward a decentralized social media ecosystem and our all-in approach to AI are yielding encouraging initial results. We look forward to further leveraging AI to empower our content ecosystem and enhance our financial performance.” “Our financial performance improved sequentially in the second quarter, marked by revenue growth and substantially narrowed operating loss,” commented Mr. Ying Tian, Chief Financial Officer of iQIYI. “We implemented our share repurchase program, underscoring our commitment to creating long-term value for shareholders.” Second Quarter 2026 Financial Highlights Footnotes: [1] Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB6.7851 as of June 30, 2026, as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. Translations are provided solely for the convenience of the reader.[2] Non-GAAP measures are defined in the Non-GAAP Financial Measures section (see also “Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures” for more details). Second Quarter 2026 Financial Results Total revenues reached RMB6.29 billion (US$926.6 million), decreasing 5% year over year. Membership services revenue was RMB4.01 billion (US$591.6 million), decreasing 2% year over year. Online advertising services revenue was RMB1.25 billion (US$183.7 million), decreasing 2% year over year. Content distribution revenue was RMB681.5 million (US$100.4 million), increasing 56% year over year, primarily driven by the increase in cash transactions. Other revenues were RMB344.9 million (US$50.8 million), decreasing 58% year over year, primarily due to the alteration of certain business cooperation arrangement. Cost of revenues was RMB5.25 billion (US$773.7 million), decreasing 1% year over year. Content costs as a component of cost of revenues were RMB3.82 billion (US$563.7 million), increasing 1% year over year. Selling, general and administrative expenses were RMB744.2 million (US$109.7 million), decreasing 22% year over year. The decrease was primarily attributable to disciplined marketing spending. Research and development expenses were RMB398.0 million (US$58.7 million), decreasing 6% year over year, primarily attributable to the decrease in personnel-related expenses. Operating loss was RMB104.8 million (US$15.4 million), compared to operating loss of RMB46.2 million in the same period in 2025. Operating loss margin was 2%, compared to operating loss margin of 1% in the same period in 2025. Non-GAAP operating loss was RMB30.3 million (US$4.5 million), compared to non-GAAP operating income of RMB58.7 million in the same period in 2025. Non-GAAP operating loss margin was 0.5%, compared to non-GAAP operating income margin of 1% in the same period in 2025. Total other expense was RMB5.5 million (US$0.8 million), decreasing 91% year over year, primarily attributable to the decrease in interest expense. Loss before income taxes was RMB110.2 million (US$16.2 million), compared to loss before income taxes of RMB108.1 million in the same period in 2025. Income tax expense was RMB219.8 million (US$32.4 million), compared to income tax expense of RMB27.2 million in the same period in 2025. The increase was primarily attributable to discrete enterprise income tax expenses and related interest totaling RMB193.6 million (US$28.5 million), relating to certain adjustments at a Chinese mainland subsidiary. Net loss attributable to iQIYI was RMB287.5 million (US$42.4 million), compared to net loss attributable to iQIYI of RMB133.7 million in the same period in 2025. The net loss was primarily due to the increase in income tax expense during the quarter. Diluted net loss attributable to iQIYI per ADS was RMB0.30 (US$0.04) for the second quarter of 2026, compared to diluted net loss attributable to iQIYI per ADS of RMB0.14 in the same period of 2025. Non-GAAP net loss attributable to iQIYI was RMB209.7 million (US$30.9 million), compared to non-GAAP net income attributable to iQIYI of RMB14.7 million in the same period in 2025. Non-GAAP diluted net loss attributable to iQIYI per ADS was RMB0.13 (US$0.02), compared to non-GAAP diluted net income attributable to iQIYI per ADS of RMB0.02 in the same period of 2025. Net cash provided by operating activities was RMB339.6 million (US$50.0 million), compared to net cash used for operating activities of RMB12.7 million in the same period of 2025. Free cash flow was RMB319.6 million (US$47.1 million), compared to free cash flow of negative RMB34.1 million in the same period of 2025. As of June 30, 2026, the Company had cash, cash equivalents, restricted cash and short-term investments of RMB4.12 billion (US$607.8 million). In addition, as of the same date, the Company had an aggregate loan of US$636.6 million to PAG, classified as a non-current asset under prepayments and other assets. Share Repurchase Program Pursuant to the Company’s share repurchase program of up to US$100 million adopted in March 2026 and effective through September 2027, as of June 30, 2026, the Company had repurchased a total of approximately 21.8 million ADSs for a total cost of US$24.1 million. Conference Call Information iQIYI’s management will hold an earnings conference call at 7:00 AM on August 18, 2026, U.S. Eastern Time (7:00 PM on August 18, 2026, Beijing Time). Please register in advance of the conference using the link provided below. Upon registering, you will be provided with participant dial-in numbers, passcode and unique access PIN by a calendar invite. Participant Online Registration: https://s1.c-conf.com/diamondpass/10056305-aij68c.html It will automatically direct you to the registration page of "iQIYI Second Quarter 2026 Earnings Conference Call", where you may fill in your details for RSVP. In the 10 minutes prior to the call start time, you may use the conference access information (including dial-in number(s), passcode and unique access PIN) provided in the calendar invite that you have received following your pre-registration. A telephone replay of the call will be available after the conclusion of the conference call through August 25, 2026. A live and archived webcast of the conference call will be available at http://ir.iqiyi.com/. About iQIYI, Inc. iQIYI, Inc. is a leading provider of online entertainment video services in China. It combines creative talent with technology to foster an environment for continuous innovation and the production of blockbuster content. It produces, aggregates and distributes a wide variety of professionally produced content, as well as a broad spectrum of other video content in a variety of formats. iQIYI distinguishes itself in the online entertainment industry by its leading technology platform powered by advanced AI, big data analytics and other core proprietary technologies. Over time, iQIYI has built a massive user base and developed a diversified monetization model including membership services, online advertising services, content distribution, online games, talent agency, experience business, etc. Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, the quotations from management in this announcement, as well as iQIYI's strategic and operational plans, contain forward-looking statements. iQIYI may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about iQIYI’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: iQIYI’s strategies; iQIYI’s future business development, financial condition and results of operations; iQIYI’s ability to retain and increase the number of users, members and advertising customers, and expand its service offerings; competition in the online entertainment industry; changes in iQIYI's revenues, costs or expenditures; Chinese governmental policies and regulations relating to the online entertainment industry, general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company’s filings with the Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of the press release, and iQIYI undertakes no duty to update such information, except as required under applicable law. Non-GAAP Financial Measures To supplement iQIYI’s consolidated financial results presented in accordance with GAAP, iQIYI uses the following non-GAAP financial measures: non-GAAP operating income/(loss), non-GAAP operating income/(loss) margin, non-GAAP net income/(loss) attributable to iQIYI, non-GAAP diluted net income/(loss) attributable to iQIYI per ADS and free cash flow. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. iQIYI believes that these non-GAAP financial measures provide meaningful supplemental information regarding its operating performance by excluding certain items that may not be indicative of its business operating results, such as operating performance excluding non-cash charges or non-operating in nature. The Company believes that both management and investors benefit from referring to the non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to iQIYI’s historical operating performance. The Company believes the non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using these non-GAAP financial measures is that the non-GAAP measures exclude certain items that have been and will continue to be for the foreseeable future a significant component in the Company’s results of operations. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company’s data. Non-GAAP operating income/(loss) represents operating income/(loss) excluding share-based compensation expenses, amortization of intangible assets resulting from business combinations. Non-GAAP net income/(loss) attributable to iQIYI, Inc. represents net income/(loss) attributable to iQIYI, Inc. excluding share-based compensation expenses, amortization of intangible assets resulting from business combinations, disposal gain or loss, impairment of long-term investments, fair value change of long-term investments, adjusted for related income tax effects. iQIYI’s share of equity method investments for these non-GAAP reconciling items, primarily amortization and impairment of intangible assets not on the investees’ books, accretion of their redeemable non-controlling interests, and the gain or loss associated with the issuance of shares by the investees at a price higher or lower than the carrying value per share, adjusted for related income tax effects, are also excluded. Non-GAAP diluted net income/(loss) per ADS represents diluted net income/(loss) per ADS calculated by dividing non-GAAP net income/(loss) attributable to iQIYI, Inc, by the weighted average number of ordinary shares expressed in ADS. Free cash flow represents net cash provided by operating activities less capital expenditures. For more information, please contact: Investor RelationsiQIYI, [email protected] (1) Net cash used for investing activities primarily consists of net cash flows from investing in debt securities, purchase of long-term investments and capital expenditures.(2) Capital expenditures are incurred primarily in connection with construction in process, computers and servers. (1) This represents amortization of intangible assets resulting from business combinations.

iQIYI (NASDAQ:IQ) shares dropped 3.0% in pre-market trading after the Chinese streaming company reported second-quarter 2026 results that fell short of Wall Street expectations, with the earnings deficit considerably larger than analysts had forecast. The company recorded an adjusted loss per ADS of RMB0.30, compared with the consensus estimate for a loss of RMB0.09. That represented a negative difference of RMB0.21 from market expectations. Quarterly revenue also missed forecasts, coming in at RMB6.29 billion against the RMB6.32 billion consensus estimate. Revenue declined by approximately 5% compared with the same quarter a year earlier. Profitability represented another source of concern for investors, with iQIYI’s net loss widening substantially during the quarter. The company reported a net loss of RMB287.5 million, more than double the level recorded in the corresponding period last year. Higher tax expenses were identified as one of the factors contributing to the deterioration. The combination of declining revenue and a larger loss reinforced concerns about the pace at which iQIYI can restore sustainable profitability. Sentiment towards iQIYI had been restrained ahead of the quarterly announcement. During the 90 days preceding the results, analysts recorded no positive revisions to earnings-per-share expectations and one downward revision, indicating that forecasts were already being approached cautiously. Against that backdrop, the larger-than-expected adjusted loss provided investors with another reason to reassess near-term earnings expectations. The broader market environment also worked against iQIYI shares, with the NASDAQ falling 1.2% and the S&P 500 declining 0.5%. That risk-off backdrop created an additional challenge for iQIYI as a relatively high-beta Chinese ADR, amplifying the negative response to its quarterly figures. The shares are already trading substantially below their 52-week high of $2.84, reflecting the pressure the stock has experienced over the past year amid continuing questions surrounding revenue growth and profitability. iQIYI’s second-quarter update left investors balancing the company’s longer-term position in China’s streaming market against weaker near-term financial performance. The combination of an adjusted earnings miss, approximately 5% year-on-year revenue contraction and a net loss that more than doubled weighed on sentiment following the release. Together with weakness across the broader technology market, those results pushed iQIYI (NASDAQ:IQ) shares lower before the U.S. opening bell as investors reconsidered how quickly the company can return to sustainable profitability. iQIYI stock price

Interested in iQIYI, Inc. Sponsored ADR? Here are five stocks we like better. Revenue rose 1% sequentially to RMB 6.3 billion, while the non-GAAP operating loss narrowed 8% to RMB 130.3 million. Strong content distribution growth and disciplined expenses helped boost operating cash flow to RMB 339.6 million. iQIYI is pursuing a strategic shift toward a more decentralized creator ecosystem and greater use of AI in content production and distribution. The company said AI can improve production efficiency substantially, with potential cost and timeline reductions of 70% to 90% for suitable formats. International membership revenue grew 40% year over year and remained profitable, with particularly strong gains in Brazil, Mexico and Arabic-speaking markets. Domestically, iQIYI also reported rising short-form content market share and stronger engagement from targeted membership initiatives. IQM's Nasdaq Debut Could Change the Quantum Race for D-Wave iQIYI (NASDAQ:IQ) reported second-quarter revenue of RMB 6.3 billion, up 1% sequentially, as growth in content distribution offset seasonally lower membership revenue. The company said its non-GAAP operating loss narrowed 8% from the prior quarter to RMB 130.3 million, bringing it closer to breakeven. Founder, Director and Chief Executive Officer Yu Gong said the company is pursuing a strategic transformation centered on decentralizing its content ecosystem and expanding the use of artificial intelligence across production and distribution. He said the two initiatives are intended to increase the number of creators, volume of content and user engagement while improving content costs, revenue quality, profitability and cash flow over time. → AMG’s Alternatives Boom Powers Record Growth 2 ETFs to Maximize Gains With Covered Call Strategies Membership services revenue totaled RMB 4.0 billion, down 4% sequentially, which Chief Financial Officer Ying Tian attributed primarily to seasonality. Online advertising revenue was RMB 1.2 billion, unchanged from the first quarter. Content distribution revenue rose 90% sequentially to RMB 681.5 million, driven by increased distribution revenue related to drama series. Other revenue fell 17% sequentially to RMB 344.9 million. Content costs were RMB 1.8 billion, up 2% sequentially. Total operating expenses were RMB 1.1 billion, down 6% sequentially, reflecting what Tian described as disciplined marketing spending. Net cash provided by operating activities increased to RMB 339.6 million from RMB 186.4 million in the first quarter. Cash, cash equivalents, restricted cash and short-term investments totaled RMB 4.1 billion at quarter-end. → Microsoft's Maia 300 Chip Targets NVIDIA's AI Dominance 2 Tech Mid-Caps Under $10 With Big Upside iQIYI also said it had a loan principal of $636.6 million receivable from PAG as of June 30, recorded in prepayments and other assets. Under its share repurchase program announced in March, the company had repurchased about 21.6 million American depositary shares for an aggregate cost of $24.1 million through June 30. The program authorizes up to $100 million in repurchases through September 2027. Gong said AI can lower barriers to content creation and increase content supply beyond what traditional centralized media models can efficiently accommodate. The company refreshed its iQIYI Creator Center in April, and said the number of creators and uploads have been trending higher. → The Metals Company’s Big Bet Now Comes Down to a License According to Gong, daily average uploads across various content categories rose between 30% and 500% in the second quarter compared with the first quarter. Daily views for micro dramas and micro animations in June rose by double digits compared with March. The company is using AI in live-action production as well as AI-generated content. Gong said AI use in the rough-cut workflow for its original series Her Prime Season 2 produced a tenfold improvement in rough-cut efficiency compared with traditional methods. For formats more suited to AI-generated production, he said AI can reduce production costs and timelines by 70% to 90% versus traditional processes. iQIYI launched 16 AI-generated short-form dramas under revenue-sharing arrangements year to date. It also premiered Mystic Tale: Qi Tan in July, which Gong described as the industry’s first AI-generated internet feature film to launch with internet-drama distribution methods. Chief Content Officer Xiaohui Wang said the company will prioritize long-form video while using AI more rapidly in micro dramas, micro animations, animation and children’s programming. For long-form dramas and theatrical films, Wang said iQIYI will continue to rely primarily on live-action production, with AI serving as a tool to improve efficiency and reduce costs without compromising quality. Gong said iQIYI maintained the top market share in long-form dramas, films and children’s content, according to Enlightent Data. In short-form dramas, the company’s market share doubled from 25% in March to 50% in June, reaching the top position for the first time, he said. The company cited the original title The Fireman: 10th Anniversary as a contributor to the short-form performance, saying the title reached a peak daily market share above 60%. Gong said short-form titles may offer lower per-minute costs and shorter production-to-approval timelines than long-form dramas. In membership operations, iQIYI said targeted discounts for students and teachers helped lift quarter-end subscribers in that cohort by more than 60% year over year. Its express packages were offered across 16 dramas during the quarter, with total participants rising nearly 80% year over year. Brand advertising revenue from drama-targeted ads grew by double digits year over year, according to Gong. The company also said performance advertising returned to year-over-year growth, aided by revenue gains from small and midsize advertisers and advertisers in AI applications, instant retail and e-commerce. Senior Vice President of International and Online Game Business Xianghua Yang said overseas membership revenue grew 40% year over year in the second quarter and that the segment remained profitable on a managerial accounting basis. Membership revenue in Brazil and Mexico increased more than 215% and 150%, respectively, while revenue in Arabic-speaking markets rose 85%, Yang said. Overseas micro-drama membership revenue grew more than 300% year over year and was the company’s second-largest membership-revenue contributor after long-form dramas. Yang said iQIYI views Thailand as a mature market and a testing ground for operating practices that can be adapted elsewhere. The company plans to use Chinese content, local programming, marketing, carrier and payment partnerships, and AI-supported translation and distribution to support expansion, while maintaining a focus on unit economics and operating contribution rather than simply entering more countries. iQIYI, Inc is a leading online entertainment service provider headquartered in Beijing, China, offering a comprehensive portfolio of streaming video content across multiple genres. The company operates a subscription-based video-on-demand (SVOD) platform, complemented by advertising-supported content (AVOD) and pay-per-view offerings. Its digital library encompasses original series, feature films, variety shows, animation and documentaries, catering to diverse demographic segments and viewer preferences. Originally launched by Baidu in 2010 as an online video site, iQIYI was formally rebranded in early 2012 and has since expanded its footprint beyond China's domestic market. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "iQIYI Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Total Revenues: RMB6.3 billion, up 1% sequentially. Membership Services Revenue: RMB4.0 billion, down 4% sequentially due to seasonality. Online Advertising Revenue: RMB1.2 billion, flat sequentially. Content Distribution Revenue: RMB681.5 million, up 90% sequentially, driven by drama series. Other Revenues: RMB344.9 million, down 19% sequentially. Content Cost: RMB3.8 billion, up 2% sequentially. Total Operating Expenses: RMB1.1 billion, down 6% sequentially. Non-GAAP Operating Loss: Narrowed by 80% sequentially to RMB30.3 million from RMB148.6 million in Q1. Net Cash Provided by Operating Activities: RMB339.6 million, up from RMB186.4 million in Q1. Cash and Investments: RMB4.1 billion in cash, cash equivalents, restricted cash, and short-term investments as of quarter-end. Share Repurchase Program: Repurchased approximately 21.8 million ADSs for USD24.1 million as of June 30. Warning! GuruFocus has detected 3 Warning Signs with IQ. Is IQ fairly valued? Test your thesis with our free DCF calculator. Release Date: August 18, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. iQIYI Inc (NASDAQ:IQ) maintained the number one market share in long-form drama, film, and children's content categories, and achieved a major breakthrough in short-form dramas, reaching number one market share for the first time in June. The company's strategic transformation towards decentralization and AI is yielding measurable results, with a significant increase in creator and content uploads, and AI-driven production reducing costs and timelines by 70-90% for AIGC content. Financial performance improved quarter-over-quarter, with total revenues growing sequentially and non-GAAP operating loss narrowing by 80%, approaching breakeven. Overseas business sustained rapid growth, with membership revenue up 40% year-over-year, and strong growth in emerging markets like Brazil and Mexico (215% and 150% year-over-year, respectively). The company is expanding its content pipeline with a diversified slate of AIGC titles, including the industry's first AIGC internet feature film with a distribution license, and is scaling supply through revenue-sharing models. Membership services revenue declined 4% sequentially due to seasonality, indicating potential volatility in subscriber spending. Other revenues decreased 19% sequentially, suggesting weakness in non-core revenue streams. Content costs increased 2% sequentially, which could pressure margins if not offset by revenue growth. The company's non-GAAP operating loss, while narrowed, still indicates ongoing profitability challenges, with a loss of RMB30.3 million in Q2. The strategic shift towards decentralization and AI may face execution risks, including the need to balance content quality with cost efficiency, and the potential for increased competition in the AIGC space. Q: With the market evolving rapidly, what is iQIYI's actual business model in the future, and what are the company's key strategic and operational priorities going forward? A: CEO Yu Gong stated that iQIYI is undergoing a strategic transformation focused on two main pillars: decentralization (shifting from a media-centric platform to a decentralized content ecosystem) and an all-in approach on AI. These pillars are designed to reinforce each other, creating a flywheel effect across creators, content volume, user base, and revenue. While premium content remains the core, AI is expected to lower production costs and shorten cycles. The company believes these strategies will structurally improve content costs, revenue quality, profitability, and cash flow over the long term. Q: What is iQIYI's overall AIGC strategy and plan across different content categories? A: Chief Content Officer Xiaohui Wang explained that AI lowers production costs but not the bar for creativity. The strategy prioritizes core long-form video while accommodating micro-dramas and animations. For micro-dramas, AIGC is the primary supply source under a revenue-sharing model. For animations and children's content, AI adoption is rapid due to mature CG industrialization. Short-form dramas and internet feature films are actively adopting AI, focusing on genres like fantasy. For long-form dramas and theatrical films, which carry the highest emotional value, the focus remains on live-action quality, using AI to support production and reduce costs. Q: In the context of the AI era and the shift towards decentralization, how does iQIYI view its core competitiveness, and what value does it offer to content creators? A: CEO Yu Gong stated that competition now centers on end-to-end capabilities from concept to commercialization. iQIYI's value to creators lies in three areas: helping them be seen, generate income, and gain recognition. This is supported by iQIYI's large audience share, deep expertise in long-form production, massive viewership data, and a seven-pillar creator support system, including the IQID Creator Center, Nadou Pro production platform, training programs, and venture summits. Q: What are the latest developments in the overseas business, and how can operational experience from major markets like Thailand be replicated in other markets? A: Senior Vice President Xianghua Yang reported that overseas membership revenue grew 40% year-over-year in Q2, with Brazil and Mexico surging 215% and 150%, respectively. Thailand serves as a proving ground, validating a set of reusable capabilities, including using C-dramas as a foundation, sustained marketing, local content supply, and partnerships with local carriers. The strategy is guided by unit economics and operating contribution, expanding into new markets only after validating revenue quality and profit-generating capabilities. Q: Can you provide details on the financial performance for the second quarter of 2026? A: CFO Ying Tian reported total revenues of RMB6.3 billion, up 1% sequentially. Membership services revenue was RMB4.0 billion, down 4% sequentially due to seasonality. Online advertising revenue was RMB1.2 billion, flat sequentially. Content distribution revenue surged 90% sequentially to RMB681.5 million. The non-GAAP operating loss narrowed by 80% sequentially to RMB30.3 million, approaching breakeven. Net cash provided by operating activities increased to RMB339.6 million. Q: How is the company's performance in the short-form drama category, and what are the structural advantages? A: CEO Yu Gong highlighted that in policy-supported short-form dramas (15-25 minutes per episode), iQIYI's market share doubled from 25% in March to 50% in June, taking the number one position for the first time. This was supported by the original title "The Ferry Man 10th Anniversary," which reached a peak daily market share above 60%. Short-form titles offer structural advantages, potentially reducing average per-minute costs by over 50% and shortening production-to-approval timelines by 30% to 50%. Q: What progress has been made in the micro-drama segment, particularly with AIGC content? A: CEO Yu Gong noted that AIGC scaled quickly under a revenue-sharing model, accounting for over 50% of the micro-drama portfolio and unique visitors in June. The company launched 16 AI-generated short-form dramas year-to-date, with "The Trial Handmaiden" as the top performer. A major milestone was the July premiere of "Mystic Tales," the industry's first AIGC internet feature film to launch with an Internet Drama and Film Distribution License, marking the official shift of long-form AIGC from technical testing to standardized production. Q: How is AI being utilized in the production of live-action content and what are the cost implications? A: CEO Yu Gong explained that AI is streamlining the entire live-action workflow. For example, in the variety show "Her Prime Season 2," AI achieved a tenfold leap in rough cut efficiency compared to traditional methods. For content types well-suited to AIGC, production costs and timelines can be reduced by 70% to 90% compared with traditional methods. The guiding principle is maximizing cost efficiency without compromising quality. Q: What is the performance of the membership business, and what initiatives are driving growth? A: CEO Yu Gong stated that membership revenue declined sequentially due to seasonality, but the company is strengthening the business with refined operations. Targeted discounts for students and teachers drove a year-over-year increase of over 60% in quarter-end subscribers within this cohort. The company also launched Express Packages across 16 dramas in Q2, driving a nearly 80% annual increase in total participants. Joint memberships with top-tier brands are being expanded to support membership growth and retention. Q: What are the highlights of the advertising business performance in Q2? A: CEO Yu Gong reported that brand ad revenue from drama-targeted ads delivered double-digit year-over-year growth, with beauty, personal care, and healthcare sectors recording double-digit growth. Performance ad revenue returned to year-over-year growth, with strong growth from small and mid-sized advertisers. Revenue from advertisers in AI applications, instant retail, and e-commerce recorded strong year-over-year growth. The company upgraded its proprietary large models to improve targeting precision and drive revenue. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

BEIJING, July 17, 2026 /PRNewswire/ -- iQIYI, China's leading online entertainment platform, wrapped up the first half of 2026 with a strong performance on its domestic platform, delivering hit after hit across dramas, variety shows, and beyond. From standout popularity indices to top critical scores, the results cement iQIYI's position as a go-to platform for high-quality, diversified content in China's streaming market. Dramas: A Commanding Lead Across Metrics iQIYI accounted for 10 of the 16 newly released long-form dramas that received an S+ rating from leading third-party data platform Enlightent across the industry in H1 2026. Furthermore, three hits spanning various genres surpassed 10,000 on iQIYI's popularity index, reflecting the company's leadership in consistently producing the industry's biggest titles. Historical romance "Pursuit of Jade" led with a peak iQIYI popularity index of 10,604 and an Enlightent peak viewership market share of 55.1%. It topped iQIYI International's rankings for H1 2026, with three of its characters placing in Enlightent's top 10 most-watched long-form drama characters of the period. Crime drama "The Punishment" followed with a peak iQIYI popularity index of 10,209 and a 26.9% viewership market share on Enlightent; absurdist crime drama "Born with Luck" recorded 10,054 and 30.4% respectively. Across 14 industry indices from Enlightent, Maoyan, Dengta, and Ky.live, iQIYI titles held the majority of top-10 positions for cumulative playback, episode-average views, and peak-period performance. Variety Shows: Franchise Strength and a Deep Creative Pipeline iQIYI's variety slate earned three Enlightent S+ ratings in H1 2026, including "Wander Together", "HAHAHAHAHA 6", and "Become a Farmer 4". "HAHAHAHAHA 6" set a new peak popularity index record for long-running seasonal IPs and topped Enlightent's variety show chart 68 times, ranking first overall in the category for H1 2026. New productions matched the pace of returning franchises. "Wander Together" captured an Enlightent peak viewership market share of 71.4% and ranked first on Enlightent's Q1 cumulative effective playback chart. Consistent Performance Across Every Category The momentum extended beyond dramas and variety shows. Original Chinese animation viewing duration surged 98% year-on-year, with playback volume growing 63% year-on-year. The platform's micro drama library surpassed 50,000 titles, with several leading both platform and industry charts. iQIYI-produced online movies set new platform records for both popularity index and audience ratings. In children's content, iQIYI held the industry's top viewership market share for effective playback, per Enlightent. iQIYI's strong H1 2026 performance demonstrated its scale, consistency, and creative depth across categories, reinforcing its ability to meet the evolving tastes of a growing audience. Contact: iQIYI Press, [email protected] View original content to download multimedia:https://www.prnewswire.com/apac/news-releases/iqiyi-reports-strong-h1-2026-content-results-cementing-its-position-as-chinas-premier-streaming-destination-302828279.html

IQ trades at $1.01, having fallen 47% year to date, but our $1.76 price target implies a BUY recommendation at moderate confidence. iQIYI's Nadou Pro AI platform surpassed 10,000 creators in one month and delivered a 50% improvement in shot production efficiency. Even the bear case lands at $1.49, representing a 47% return anchored by a $100 million buyback and a planned Hong Kong Stock Exchange listing. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and iQIYI didn't make the cut. Grab the names FREE today. iQIYI's (NASDAQ:IQ) NASDAQ-listed shares have been beaten down to penny-stock territory, but our proprietary model sees meaningful recovery potential over the next twelve months. iQIYI trades at $1.01, down 47.4% year to date and 42.94% over the past year. Our 24/7 Wall St. price target for iQIYI is $1.76, implying 74.21% upside and a buy recommendation at moderate confidence. iQIYI peaked near $2.57 in September 2025 and has slid to a 52-week low close to $0.95. Q1 2026, filed May 18, 2026, missed on the top line with revenue of $913.32 million, down 13.37% YoY, while EPS of -$0.0352 beat estimates by 83.81%. Membership Services fell 5% and Content Distribution plunged 43%. Offsetting the gloom, iQIYI announced a proposed Hong Kong Stock Exchange listing and a $100 million buyback running through September 2027. The bull thesis rests on iQIYI's AI pivot. Nadou Pro, the company's AI production platform, surpassed 10,000 registered creators within one month of commercial launch and is now supporting 100+ iQIYI original productions, with the "None Shall Escape" project showing a 50% improvement in shot production efficiency. Overseas, Southeast Asia membership revenue is growing 40%+ annually, and a Viu bundle deal targets H2 2026. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and iQIYI didn't make the cut. Grab the names FREE today. CEO Yu Gong said the team is "leveraging AI to reduce content production costs, accelerate production cycles, and expand our content ecosystem." Across 23 analysts, the consensus is 12 Buys, 10 Holds, 1 Sell, with targets ranging up to $2.44. Our bull-case scenario reaches $2.37, a 135% total return, if AI efficiency gains translate into 2027 GAAP profitability. The bear case is grounded in structural decline. Full-year 2025 revenue fell 6.62% and operating income collapsed 87.34%. Morningstar cut its valuation 50% to $0.50, citing user migration to short-form platforms like Douyin and Bilibili and rising content costs. Benchmark kept a Hold, arguing the AI shift lacks a clear sustainable growth inflection. PAG loan exposure of $636.6 million and convertible notes remain overhangs. That said, bulls would argue Q1 SG&A was cut 20% to $119.78 million and Q1 free cash flow of $16.10 million was positive despite the revenue miss. Our bear-case still lands at $1.49, a 47.38% return, reflecting the low absolute share price and buyback floor. The 24/7 Wall St. price target of $1.76 supports a buy at moderate confidence. The decisive factor: even the bear-case scenario projects positive returns, thanks to a depressed starting price, a $100 million buyback, and a Hong Kong listing optionality. The bull thesis strengthens if Q2 2026 confirms membership stabilization and AI-driven cost reductions widen gross margins back toward 25%. The thesis weakens if Membership Services declines accelerate beyond 10% or if convertible note refinancing terms harden. Looking further ahead, here is where our model projects iQIYI could trade in the coming years, assuming current trajectories hold. These projections assume iQIYI executes on its AI content strategy and reaches GAAP profitability by 2027. Significant upside could come from Nadou Pro monetization, while downside risk centers on China advertising weakness and short-form competition. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and iQIYI didn't make the cut. Grab the names FREE today. Contact [email protected] for any questions or corrections.

This article first appeared on GuruFocus. Total Revenues: RMB6.2 billion, down 8% sequentially. Membership Services Revenue: RMB4.2 billion, up 2% sequentially. Online Advertising Revenue: RMB1.2 billion, down 8% sequentially. Content Distribution Revenue: RMB358.7 million, down 54% sequentially. Other Revenues: RMB426.7 million, down 22% sequentially. Content Cost: RMB3.7 billion, down 2% sequentially. Total Operating Expenses: RMB1.2 billion, down 10% sequentially. Net Cash Provided by Operating Activities: RMB186 million. Non-GAAP Operating Loss: RMB149 million. Non-GAAP Operating Loss Margin: Approximately 2%. Cash and Cash Equivalents: RMB4 billion at quarter end. Repurchase of Convertible Senior Notes: Reduced outstanding debt, strengthening capital structure. Share Repurchase Program: Approximately 6.45 million ADS repurchased for USD8 million. Warning! GuruFocus has detected 3 Warning Signs with IQ. Is IQ fairly valued? Test your thesis with our free DCF calculator. Release Date: May 18, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. iQIYI Inc (NASDAQ:IQ) reported a sequential growth in membership revenue, driven by a strong lineup of premium content. The company's overseas business has become a significant growth driver, with membership revenue in Southeast Asia increasing by over 40% annually. iQIYI Inc (NASDAQ:IQ) is expanding into new content formats like short-form dramas and Internet feature films, which are cost-effective and attract a broader pool of creative talent. The company is leveraging AI to enhance content creation and operational efficiency, with initiatives like Nado Pro supporting content production and commercialization. iQIYI Inc (NASDAQ:IQ) is actively expanding its presence in high-growth international markets, including the Middle East and Latin America, with Brazil as a key focus. Total revenues for Q1 2026 were down 8% sequentially, indicating challenges in maintaining consistent revenue growth. Online advertising revenue decreased by 8% sequentially, primarily due to seasonality, highlighting potential volatility in this revenue stream. Content distribution revenue saw a significant decline of 54% sequentially, attributed to fewer dramas being distributed to third parties. The company reported a non-GAAP operating loss of RMB149 million, reflecting ongoing financial challenges. Cash balance decreased sequentially, partly due to the repurchase of convertible senior notes, which could impact liquidity. Q: Could management share more details about the recent progress of Nado Pro and its commercialization prospects? A: Nado Pro is iQIYI's proprietary platform for studio-grade content production, powered by public large models and deep content expertise. It has over 10,000 active creators and covers various content formats. The platform will soon have an international version and aims to boost monetization capabilities through continuous upgrades. - Yu Gong, CEO Q: What is the latest progress on the industry's anti-piracy efforts? A: Positive progress has been observed with a targeted campaign by the National Radio and Television Administration to crack down on piracy. New policies enforce dual responsibilities for platforms and local authorities, requiring swift removal of infringing content. This is expected to significantly mitigate piracy issues and protect commercial interests. - Xiaohui Wang, Chief Content Officer Q: How does management view the sustainability of the membership business's growth, especially overseas? A: The membership business showed sequential growth in Q1, driven by premium content and refined strategies. With a strong content pipeline and operational focus, the business is expected to maintain a steady development trajectory. - Youqiao Duan, Senior Vice President Q: What are iQIYI's investment strategies in the Southeast Asia market, and how do audience preferences differ domestically versus overseas? A: iQIYI is investing in key Southeast Asian markets like Thailand and Indonesia, focusing on C-dramas and content favored by young female users. The strategy includes local content production and partnerships with telecom carriers to expand membership. Overseas audiences are primarily young females under 40, with higher ARPU compared to domestic users. - Xianghua Yang, Senior Vice President Q: How does iQIYI view the competitive landscape in the AI era for long-form video content? A: AI reduces content costs and production cycles, allowing more titles and choices for users, improving business fundamentals. Initiatives like Nado Pro and IGI account enable content creators to monetize their work, enhancing the platform's content diversity and user engagement. - Yu Gong, CEO For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Monday, May 18, 2026 at 7 a.m. ET CEO — Tim Yu Chief Financial Officer — Ying Zeng Chief Content Officer — Xiaohui Wang Senior Vice President, Membership Business — Youqiao Duan Senior Vice President, Overseas Business — Xianghua Yang Tim Yu: Hello, everyone, and thank you all for joining us today. The convergence of breakthrough AI and supportive domestic regulatory landscape is fundamentally reshaping entertainment and creating incredible opportunities for iQIYI. Let me share iQIYI's value proposition in this new era from 3 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 strategy. Premium content remains the cornerstone of our strategy. And in Q1, we reaffirmed its compelling appeal for audiences. Our diverse lineup of hit dramas, including The Punishment 2, Azay Are, Born to Be Alive, Sheng Shu, Pursuit of Jade, Zhu Yu, and How Dare You!?, Chong Qi 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 program and driving stronger capital efficiency. Importantly, these regulatory policies are unlocking innovation across new formats. This includes short-form dramas Zhong Ju. Typically 15 to 25 minutes per episode with flexible episodes counts and internet feature films, Wang Wo Gu Shi Pian which are limited to 3 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, ultimately 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 strength. 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 in from a highly differentiated market position 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 continues 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. We are 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 life cycle. 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 the explore 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. We are also cultivating private traffic, 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 decentralized planning flow drives scale. Our original will serve as our signature offerings. Additionally, we are building comprehensive support system so creators can focus purely on creativity. One key pillar is Nadou Pro, iQIYI's proprietary platform for studio-grade content production. Nadou Pro is powered by both public and self-deployed large models, but it goes beyond generic models. It built upon our years of technology infrastructure and deep content expertise. We transform years of industry know-how into AI agent and combine them with our core IP and digital assets to deliver accessible platform capabilities. 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 define iQIYI's long-term investment value and how we are uniquely positioned to lead in the AI era. Our confidence rests on 2 core pillars. First, hard-to-replicate competitive moat. We possess a unique blend of deep content expertise and a cutting-edge technology. We have a proven DNA of innovation from pioneering in 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 area. Alongside a high engaged user base that we are committed to serving with excellence. Second, 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 IP originals focus on crafting enduring premium IPs together. The 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 to empower humanity, not replace it. It will serve audiences with richer, deeply resonate content. It will empower creators to overcome human limitations and 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. Now let's move on to the detailed performance in Q1. Let's start with content. We are pioneering AI-driven storytelling and talent cooperation. In Q1, we unveiled Peter Pau iQIYI AI Theater, featuring a suite of 16 titles across Science Fiction, Thriller, Wuxia and Fantasy genres, each running 11 to 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 2 became our second franchise with 2 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. 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. And The Devil Between Us 2, and our own suspense theater brand, was also well received by users. For variety shows, our in-house production Wander Together, [Foreign language]. Topped enlightent market share ranking for the first quarter. For animations, we expanded our offering with 4 key original titles among these, the long-running The Great Ruler continued to captivate audiences and Season 2 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 featured over 14,000 titles as of quarter end with viewership continuing to rise steadily. Next, let me show our Q2 content pipeline. Our drama serials lineup features a rich variety of titles from historical tactics to niche genres, including Echoes of a Thousand Moons [Foreign Language] Bloom Lion, [Foreign Language] Born with Luck, [Foreign Language] The Heir and Archives: The Nanyang Mystery, Nandu 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, Awakening of Insects in Silence, Jing Zhe Wu Sheng, and The Blaze of the Goddess, 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 Huang Mi Wei 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 grew 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 higher care F7 membership continued to scale, driven by a highly differentiated value proposition that features free express packages. Next, 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. Furthermore, we are expanding our advertising appeal new content formats. For example, we partner with leading advertisers to coproduce 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 with 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 ads focus on 4 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 windows 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 continues to expand. Notably, Pursuit of the Chaser Games 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 broadcasted during the same window in 15 markets and set a record as the most 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 3 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 language, including English, Thai, Korean and Indonesian. Next, our experience business we focus on 2 core areas, IP-based consumer products and iQIYI LAND. For IP-based consumer products, our self-operated merchandise delivered solid performance with collectible cards from Pursuit of the Chaser Games, setting a new sales record in this category. For offline experience business, our first iQIYI LAND in Yangzhou performed in line with expectation 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. Ying Zeng: 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 key 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 cost 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 [ RMB 1,400 million] and non-GAAP operating loss margin was approximately 2%. As of the end of Q1, we had cash, 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 USD 636.6 million to PAG recorded under the line item of prepayment 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 USD 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 USD 8 million. For detailed financial data, please refer to our press release on our IR website. Now I will open the floor for Q&A. Operator: [Operator Instructions] Your first question comes from Xueqing Zhang with CICC. Xueqing Zhang: [Interpreted] And 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. Tim Yu: [Interpreted] The CEO Gong is taking this question. So Nadou Pro is iQIYI's proprietary platform for studio-grade content 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-how from key areas such as screen writing, filming and production into AI agents and combine 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. Nadou Pro has been available to all creators across the industry since April 20. We now currently have over 10,000 active creators on board, ranging from traditional production companies to independent creators. Content productions cover a wide variety of formats, including the long-form dramas, micro dramas, micro animation and for videos and also for some commercial app content. Among which about 100 of them are iQIYI original titles projects. Nadou Pro actually recently launched a creator community as a platform for creators to interchange experiences and for some feedback and that will feed internal development for the upgrades in the coming up versions. And also, this platform will feature some commercial matchmaking features upcoming. And then these will empower the creators with the full cycles from content creation to commercial monetization. In addition, the international version of Nadou Pro is in development and will be online soon. Regarding Nadou Pro's commercial prospects, it will serve as a stand-alone product to boost actually monetization capabilities. And it will continue to reiterate and continue to improve the development and also roll out the upgraded version to create more better features. Operator: Next question comes from Vicki Wei with Citi. Yi Jing Wei: [Interpreted] Would management share some latest progress about the industry anti-piracy update? Tim Yu: Thanks. We will invite our Chief Content Officer, Xiaohui to take this question. Please go ahead. Xiaohui Wang: [Interpreted] 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. To 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. 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 4 hours. And third, building a coordinated enforcement mechanism, regularly reporting on infringement status, takedown and typical cases for repeat offenders who will be publicly named and handed over to copyright and police authorities for investigation and prosecution. This targeted campaign will be integrated with routine regulatory enforcement. Looking ahead, the National Copyright Administration SwordNet 2026 anti-piracy special campaign has designated online copyright infringement and piracy as its top priority, signaling even stricter enforcement measures. Currently, we're happy to see the efficiency of handling infringement has improved significantly, and 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 fosters a virtuous cycle of content supply. And 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. Operator: Your next question comes from Jenny Yuan with UBS. Yicheng Yuan: So let me translate myself. So membership business saw sequential recovery in the first quarter. In particular, overseas business delivered a robust growth momentum. So how does management view the sustainability of this improving trend? And how should we think about the membership business outlook into second quarter and beyond? Tim Yu: Thanks, Jenny. We'll invite the Senior Vice President of membership business to take on this question. Go ahead, please. Youqiao Duan: [Interpreted] In Q1, driven by a strong slate of premium content and refined operational strategies, membership revenue delivered sequential growth in the first quarter. We have a rich content pipeline for Q2. A number of recently launched titles actually have performed well. Notably, Born with Luck surpassed 10,000 on iQIYI's Popularity Index, powered by a distinct suspense but comedy narrative style. And in addition, we have also expanded slate for the second quarter, including the long-form dramas, for example, Echoes of a Thousand Moons, The Epoch of Miyu, The Heir and for variety shows, we have Hahahahaha Season 6, Become A Farmer Season 4. And we believe this content will effectively reach a broad membership base. Looking ahead, for Q2, we're looking at our operations and sales priorities. For example, we're focusing on reactivating dormant members, optimizing variety shows schedules to offer more content for members and expanding large screen membership via joint operating initiatives with smart TV manufacturers and also leveraging the June 18 e-commerce festival to boost annual and bundled membership. And together, we believe these efforts will expand our subscriber base and expand subscription cycles. And 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. Operator: Your next question comes from Thomas Chong with Jefferies. Thomas Chong: [Interpreted] Congratulations on the fast growth of your overseas business. Just now, we talked about the fast growth in Southeast Asia. So may I ask about our investment strategies in Southeast Asia market? And also, can you share about some of the differences or similarities in terms of the audience preference in domestic versus overseas? Chang Yu: Thank you, Thomas. We'll invite our Senior Vice President of our overseas business, Mr. Xianghua to take on this question. Xianghua Yang: [Interpreted] Okay. Well, I will take this parts into 2 segments. First, for the key markets. Currently, our key markets are performing pretty well. And then for the Southeast Asia market has been growing quickly. And for the market that's crucial for our Southeast Asia, we'll continue to invest in countries such as Thailand, Indonesia, Malaysia, Vietnam and Philippines. And also for some of the emerging markets that's been also growing pretty well, for example, North America, Brazil, et cetera. So we'll continue to invest in these areas and markets. Let's start with content. So for us, our key differentiation is our C-drama. So that will continue to be our key in terms of getting users and especially for the content that's favorable and liked by young female users. And in key areas that I mentioned earlier, that will increase the promotional activities and marketing activities for the market. For example, for user growth, using content to attract and also to retain users. And for local content, we control and also have 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. And third, for our mature markets, we'll continue to cooperate with telecom carriers and also e-commerce platform to increase our membership scale, and we will continue to use this strategy to replicate to other markets that we're trying to explore. In terms of the user demographics for overseas audiences, is majority focusing on the young female users who are under 40 years old. For the user behaviors for overseas market, each major market is a bit different. Some of them have higher user subscription cycles, better cycles, better retention than others. But overall speaking, the ARPU for overseas memberships are higher than the domestic ones. Operator: Your next question comes from Gigi Xiao with Guangfa. Unknown Analyst: [Interpreted] 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. Tim Yu: [Interpreted] For long-form video, 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 is invested and rolled out for the industry. And 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 the situation. Under the AI model, 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. And because there are more content, there are more choices for users to enjoy. So user scale will increase under the new AI model. So 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. To better accommodate this industry trend, we roll out a number of initiatives and also the iQIYI accounts which means the users can upload the content to our platform. Under the revenue share model, they will have the opportunity to introduce the content to more users to enjoy and to increase the revenue performance and also monetization capabilities. So under this backdrop, we believe the content cost will be lower and the number of video content will be increased. 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 industry boom and industry development. So we think under this AI era, we think it becomes a great opportunity for the long-term video to have better economics and better industry dynamics. Operator: There are no further questions at this time. I'll now hand back to the company for closing remarks. Tim Yu: Thank you, everyone, for participating on the call today. If you have further questions, don't hesitate to contact us. Thank you. Operator: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect. 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