iQIYI (IQ) Q2 2024 earnings summary

Executive summary

• Total Q2 2024 revenue was RMB 7.4 billion ($1.0 billion), down 5% year-over-year amid intense competition, but market leadership in drama was regained by July.

• Operating income was RMB 342.1 million, a 44% decrease year-over-year, with a 5% margin; non-GAAP operating income was RMB 501.4 million (7% margin).

• Net income attributable was RMB 68.7 million, down 81% year-over-year; non-GAAP net income was RMB 246.9 million, down 58%.

• Focused on stable premium content supply, user experience, diversified monetization, and prudent financial management.

• Leveraged AI for content creation, operational efficiency, and advertising innovation.

Financial highlights

• Membership services revenue was RMB 4.5 billion, down 9% year-over-year due to content slate fluctuation.

• Online advertising revenue was RMB 1.5 billion, down 2% year-over-year, with performance ads growing but brand ads declining.

• Content distribution revenue grew 2% year-over-year to RMB 698 million; other revenues rose 16% to RMB 784 million.

• Operating cash flow was RMB 411 million, positive for nine consecutive quarters, but down from RMB 885.6 million a year ago; free cash flow was RMB 382.5 million.

• Diluted net income per ADS was RMB 0.07, compared to RMB 0.37 a year ago; non-GAAP diluted net income per ADS was RMB 0.25, down from RMB 0.61.

Outlook and guidance

• Plans to expand premium content, especially targeting mainstream and female audiences.

• Will increase production of local original content overseas and deepen telecom partnerships.

• Focus on optimizing account sharing and combating piracy to support long-term membership growth.