iQIYI Announces Fourth Quarter and Fiscal Year 2023 Financial Results

Core Viewpoint - iQIYI, Inc. reported its best financial performance in corporate history for the fiscal year 2023, with significant increases in total revenues, operating income, and net income, reflecting a successful turnaround from previous years [4][3]. Financial Highlights for Fourth Quarter 2023 - Total revenues reached RMB7.7 billion (US$1.1 billion), a 1% increase year over year [2][9]. - Operating income was RMB773.7 million (US$109.0 million), with an operating income margin of 10%, consistent with the same period in 2022 [2][11]. - Net income attributable to iQIYI was RMB466.2 million (US$65.7 million), up 53% from RMB304.3 million in the same period in 2022 [2][12]. - Non-GAAP net income attributable to iQIYI was RMB682.0 million (US$96.1 million), a decrease of 20% year over year [2][12]. Financial Highlights for Fiscal Year 2023 - Total revenues were RMB31.9 billion (US$4.5 billion), representing a 10% increase from 2022 [3][14]. - Operating income increased to RMB3.0 billion (US$421.1 million), with an operating income margin of 9%, compared to 5% in 2022 [3][16]. - Net income attributable to iQIYI was RMB1.9 billion (US$271.2 million), a significant recovery from a net loss of RMB136.2 million in 2022 [3][17]. - Non-GAAP net income attributable to iQIYI was RMB2.8 billion (US$399.8 million), compared to RMB1.3 billion in 2022 [3][17]. Membership and Revenue Streams - Membership services revenue for Q4 2023 was RMB4.8 billion (US$677.3 million), a 1% increase year over year, with an average daily number of total subscribing members at 100.3 million [9][10]. - Online advertising services revenue was RMB1.7 billion (US$232.5 million), increasing 6% year over year, driven by brand advertising growth [9][10]. - Content distribution revenue decreased by 21% year over year to RMB506.1 million (US$71.3 million), primarily due to a reduction in barter transactions [10][15]. Cost Management and Financial Health - Cost of revenues was RMB5.5 billion (US$779.3 million), a 2% increase year over year, with content costs decreasing by 5% to RMB3.7 billion (US$524.5 million) [10][11]. - Selling, general and administrative expenses increased by 1% to RMB947.8 million (US$133.5 million) [11]. - The company reported operating and free cash flows exceeding RMB3.3 billion in 2023, indicating improved financial health [4][3]. Cash Position and Debt Management - As of December 31, 2023, the company had cash, cash equivalents, and restricted cash totaling RMB6.2 billion (US$876.4 million) [13]. - The company repurchased US$31.0 million of its convertible senior notes due 2026 during Q4 2023 [13].