iQIYI's Blockbuster Strategy Drives Sequential Growth in Operating Profit

iQIYI, Inc. (Nasdaq: IQ), a leading provider of online entertainment video services in China, announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2024, showcasing a strong rebound in business performances driven by a series of blockbuster releases and strategic investments in mini-dramas. The company's focus on long-form content and innovative formats has contributed to its market leadership and sequential growth in operating profit.

iQIYI's fourth quarter results highlighted a 14% year-over-year decrease in total revenues to RMB6.61 billion (US$906.0 million), primarily due to a lighter content slate. However, the company's operating income margin improved to 4% from 10% in the same period in 2023, demonstrating its ability to maintain profitability despite the revenue decline. Non-GAAP operating income margin also improved to 6% from 12% in the same period in 2023, indicating the company's focus on operational efficiency.



iQIYI's blockbuster strategy, which included the release of popular titles like "We Are Criminal Police" and new releases from the "Light On Theater" brand, such as "Let Wind Goes By," drove a strong rebound in business performances and reinforced the company's No.1 position in total drama market share in Q4 2024. This momentum continued into the start of 2025, leading to a significant increase in subscribing members from the end of 2024 to now.



In addition to its focus on long-form content, iQIYI has seen great potential in mini-dramas to bolster its ad inventory and contribute to its ad revenue growth in 2025. The company has revamped its products to optimize user experience, expanded its mini-drama portfolio to over ten thousand titles, and enhanced the ad-placement system to more effectively monetize the growing traffic of its mini-dramas. Although still in an early stage, iQIYI's investment in mini-dramas has the potential to drive significant growth in the long term.

iQIYI's investment in overseas markets has also been instrumental in driving its overall financial performance. The company's stronghold in long-form content and breakthroughs in mini-dramas have contributed to its success in both the domestic and international markets. With the release of more smash hits and the continued expansion of its mini-drama portfolio, iQIYI is well-positioned for future growth in both regions.

In conclusion, iQIYI's focus on long-form content and mini-dramas, coupled with its strategic investments in overseas markets, has driven sequential growth in operating profit and reinforced its market leadership. The company's ability to maintain profitability despite revenue declines and its commitment to operational efficiency suggest that iQIYI is well-positioned for future growth and success in the competitive online entertainment video services market.