iQIYI Inc's Q2 2025 Earnings Call Highlights: Navigating Challenges with Strategic Innovations

iQIYI Inc reported Q2 2025 total revenue of RMB6.6 billion, with membership services revenue down 9% annually, online advertising revenue decreased by 13% annually, and content distribution revenue fell by 37% annually. The company achieved strong performance in its overseas business, with membership revenue growing by around 35% annually. iQIYI Inc introduced innovative AI-powered features and expanded its content ecosystem with successful original productions in micro dramas.

iQIYI Inc (NASDAQ:IQ) reported its Q2 2025 financial results, showcasing a total revenue of RMB6.6 billion. The company's membership services revenue decreased by 9% annually, reaching RMB4.1 billion, while online advertising revenue fell by 13% to RMB1.3 billion. Content distribution revenue dropped by 37% to RMB436.6 million. Despite these declines, iQIYI achieved strong overseas growth, with membership revenue increasing by around 35% annually, driven by markets such as Brazil, Mexico, and Indonesia. The company also introduced innovative AI-powered features and expanded its content ecosystem with successful original productions in micro dramas [1][2][3].

iQIYI's non-GAAP operating margin stood at 1%, with non-GAAP operating income of RMB58.7 million. The company reported a total of RMB5.1 billion in cash, cash equivalents, and investments, and repurchased $85 million in 2028 notes, leaving $208 million outstanding. Despite facing challenges in maintaining disciplined cost and expense management, iQIYI's content costs decreased by 8% annually to RMB3.8 billion [1][2].

The company's overseas expansion and AI-driven product innovations highlight its ability to adapt to market changes and drive growth. iQIYI's AI adoption has accelerated user engagement and digital asset production, while supporting advanced qualitative script analysis and personalizing user interactions. For example, AI-powered features such as iJump Talkout and Touhou World contributed to a 20% higher click-through rate for AI-driven ads compared to traditional ads in Q2 2025 [3].

Looking ahead, iQIYI confirmed its continued investment in AI, expansion of original micro drama production overseas, rollout of new IP-based consumer product lines, and growing premium content for both domestic and international markets. The company also emphasized further optimization of its debt structure and sufficient liquidity to support future strategic initiatives. However, no specific guidance for revenue or margin was disclosed in the transcript [3].

References:
[1] https://uk.finance.yahoo.com/news/iqiyi-inc-iq-q2-2025-070422238.html
[2] https://seekingalpha.com/news/4487301-iqiyi-non-gaap-eps-of-000-in-line-revenue-of-9253m-in-line
[3] https://www.nasdaq.com/articles/iqiyi-q2-revenue-hits-rmb66-billion