iQIYI(US:IQ) Sou Hu Cai Jing·2025-08-25 04:41Core Viewpoint - iQIYI's Q2 performance shows a significant decline, with the company transitioning from profit to loss, raising concerns about its future strategies to address these challenges [1][4]. Revenue Performance - In Q2, iQIYI reported total revenue of 6.628 billion yuan, a year-on-year decrease of 11%, equating to a drop of over 800 million yuan [3]. - Membership revenue, a key income source, fell by 9% to 4.09 billion yuan, while advertising revenue decreased by 13% to 1.27 billion yuan, and content distribution revenue plummeted by 37% to 437 million yuan [3]. - The company experienced a net loss of 134 million yuan in Q2, compared to a net profit of 68.7 million yuan in the same period last year, indicating a significant shift in financial health [3]. User Base and Market Trends - iQIYI is facing challenges with user attrition and declining membership revenue, a trend also observed across other long-video platforms [4]. - The CEO, Gong Yu, noted a general decline in viewership for dramas across both television and online platforms, particularly over the past two to three years [4]. Strategic Adjustments - In response to current challenges, iQIYI is making strategic adjustments by heavily investing in short dramas, although competition in this segment is intense [4]. - The CEO expressed optimism about the upcoming summer season, anticipating the release of popular content that could positively impact Q3 performance [4]. Historical Context - iQIYI had previously achieved profitability in Q1 2022, breaking a long-standing cycle of losses, but has since reverted to a loss in Q1 2023, highlighting the volatility of the internet industry [5].