iQIYI (IQ) Q2 2026 earnings summary

Executive summary

• Achieved number one market share in long-form drama, film, children's content, and, for the first time, short-form dramas in June.

• Strategic transformation underway: shifting to a decentralized, creator-driven ecosystem and fully embracing AI to optimize content creation and cost efficiency, with initial positive results.

• AI-driven initiatives led to a surge in content supply, improved production efficiency, and lower costs, with measurable results in Q2.

• Total revenues for Q2 2026 were RMB 6.3 billion, up 1% sequentially but down 5% year-over-year.

• Premium content recognized with 14 Magnolia Awards, including 10 of 11 in the drama category.

Financial highlights

• Membership services revenue was RMB 4.01 billion, down 2% year-over-year and 4% sequentially due to seasonality.

• Online advertising revenue was RMB 1.25 billion, flat sequentially and down 2% year-over-year; content distribution revenue surged 90% sequentially and 56% year-over-year to RMB 681.5 million.

• Non-GAAP operating loss narrowed by 8% sequentially to RMB 130.3 million, but was RMB 30.3 million (0.5% margin) for Q2 2026, compared to non-GAAP operating income of RMB 58.7 million last year.

• Net cash from operating activities increased to RMB 339.6 million, up from net cash used of RMB 12.7 million last year; free cash flow was RMB 319.6 million, compared to negative RMB 34.1 million last year.

• Net loss attributable to shareholders widened to RMB 287.5 million, mainly due to higher income tax expense.

Outlook and guidance

• Expect continued structural improvements in content costs, revenue quality, profitability, and cash flow from AI and decentralization strategies.

• Pipeline for H2 includes diversified long-form dramas, short dramas, films, variety shows, and animations, with a strong focus on AIGC titles.

• Overseas business expected to expand further, leveraging proven models from mature markets.