iQIYI Announces Third Quarter 2024 Financial Results

Core Insights - iQIYI reported a total revenue of RMB 7.2 billion (US$1.0 billion) for Q3 2024, a decrease of 10% year over year [2][6] - The company experienced a significant decline in operating income, which was RMB 238.9 million (US$34.0 million), down 68% from RMB 746.7 million in Q3 2023 [2][10] - Net income attributable to iQIYI was RMB 229.4 million (US$32.7 million), representing a 52% decrease compared to RMB 475.9 million in the same period last year [2][13] Financial Performance - Membership services revenue decreased by 13% year over year to RMB 4.4 billion (US$622.1 million) due to a lighter content slate [6] - Online advertising services revenue fell by 20% year over year to RMB 1.3 billion (US$190.5 million), primarily due to a decline in brand advertising [6] - Content distribution revenue increased by 52% year over year to RMB 814.0 million (US$116.0 million), driven by an increase in barter transactions [7] Cost and Expenses - Cost of revenues was RMB 5.6 billion (US$805.1 million), a decrease of 3% year over year, with content costs at RMB 4.0 billion (US$569.0 million), down 5% [8] - Selling, general and administrative expenses decreased by 7% year over year to RMB 907.9 million (US$129.4 million) due to reduced marketing spending [9] - Research and development expenses remained flat year over year at RMB 449.0 million (US$64.0 million) [10] Cash Flow and Financial Position - Operating cash flow was RMB 242.5 million (US$34.6 million), down from RMB 830.7 million in Q3 2023 [14] - Free cash flow also decreased significantly to RMB 234.8 million (US$33.5 million) from RMB 826.5 million in the same period last year [14] - As of September 30, 2024, the company had cash and cash equivalents totaling RMB 4.7 billion (US$673.8 million) [15] Strategic Initiatives - iQIYI aims to enhance its content offerings by integrating mini and short dramas alongside its long-form content portfolio [3] - The introduction of a family account option within membership programs is expected to better meet users' evolving entertainment needs [3] - The company believes that optimizing long-form video offerings and incorporating new content types will lead to long-term value creation [3]