iQIYI Q3 revenue fell 10% year-on-year, content distribution revenue surged 52% | Financial Report Insights
In the third quarter, iQIYI's online advertising and membership service revenues both declined, dragging down net profit by 52% year-on-year. The company stated that it will optimize long video products and incorporate micro-short dramas into its content mix to enhance content appeal
iQIYI's revenue and profit both declined in the third quarter, with only content distribution revenue achieving year-on-year growth. On Thursday, November 21, iQIYI announced its third-quarter performance, with the following data:
1) Key Financial Data
Revenue: The company's total revenue for the third quarter was 7.2 billion yuan (approximately 1 billion USD), a year-on-year decrease of 10%.
Operating Profit: The company's operating profit for the third quarter was 238.9 million yuan, a year-on-year decrease of 68%, with an operating profit margin of 3%; compared to 746.7 million yuan in the same period of 2023, with an operating profit margin of 9%.
Net Profit: The net profit attributable to iQIYI was 229.4 million yuan, while in the same period of 2023 it was 475.9 million yuan, a year-on-year decrease of 52%.
Online Advertising and Membership Service Revenue Both Decline, Increasing Focus on Micro-Short Dramas
From a business perspective, membership service revenue was 4.4 billion yuan, a year-on-year decrease of 13%, mainly due to a lack of content; online advertising service revenue was 1.3 billion yuan, a year-on-year decrease of 20%, primarily due to a reduction in brand advertising business, although this was partially offset by growth in performance advertising business. Other revenue was 728.8 million yuan, a year-on-year decrease of 8%.
Thanks to the growth in barter transactions, iQIYI's content distribution revenue increased by 52% year-on-year to 814 million yuan.
In terms of costs and expenses, iQIYI's content costs for the third quarter were 4 billion yuan, a year-on-year decrease of 5%, mainly due to a reduction in movie supply during the quarter; selling and administrative expenses were 910 million yuan, a year-on-year decrease of 7%, mainly due to reduced marketing expenditures. Research and development expenses were 450 million yuan, unchanged year-on-year.
iQIYI's Chief Financial Officer Wang Jun stated:
"Our goal is to enhance content appeal by optimizing long video products and incorporating micro-short dramas into our content mix. We believe that through rigorous execution, these initiatives will create long-term value for our business."
After the financial report data was released, iQIYI's U.S. stock fell by 2.29% in pre-market trading.
