iQIYI's Q2 Earnings Call: Strong Content Performance, Revenue Challenges Ahead

iQIYI Inc's Q2 earnings call highlighted strong content performance with three original dramas achieving high popularity scores and maintaining market share leadership. Overseas business grew, with membership revenue in foreign markets increasing by 35% annually. However, revenue declined in membership services (9% annually), advertising (13% annually), and content distribution (37% annually). The company plans to solidify its drama viewership market lead and expects continued growth in overseas markets.

iQIYI Inc. (IQ) held its Q2 earnings call, presenting a mixed performance with notable achievements in content and overseas markets, alongside revenue challenges. The company reported strong content performance, with three original dramas achieving high popularity scores and maintaining market share leadership. Variety shows also performed well, with "The King of Stand Up Comedy Season Two" commanding the highest viewership market share.

Overseas business growth was significant, with membership revenue in foreign markets increasing by approximately 35% annually. However, the company faced declines in key revenue streams. Membership services revenue fell by 9% annually, totaling RMB4.1 billion. Online advertising revenue saw a 13% annual decrease, influenced by macroeconomic pressures. Content distribution revenue declined by 37%, primarily due to a decrease in other transactions.

Looking ahead, iQIYI aims to solidify its leadership in the drama viewership market with blockbuster releases like "Field" and "Coroner’s Theory." The company anticipates continued growth in overseas markets, particularly in Brazil and Indonesia, with membership revenue expected to grow by around 35% annually. Financially, iQIYI reported total revenues of RMB6.6 billion, with disciplined cost management resulting in an 8% reduction in accounting costs.

Despite the mixed performance, iQIYI remains focused on leveraging its strengths in content and innovation to drive future growth. The company is committed to leveraging technology for business growth, as seen in the introduction of AI-powered features like the iJump Talkout.

References:
[1] https://www.tipranks.com/news/company-announcements/iqiyi-earnings-call-content-success-amid-revenue-challenges
[2] https://www.ainvest.com/news/xgd-plans-hong-kong-listing-2508/