Chinese Streamer iQiyi Increases Profits in First Quarter

Chinese video streamer iQiyi reported increased profits in the first quarter of the year, derived from lower revenue.

The company, which is NASDAQ-listed but majority owned by Chinese tech giant Baidu, said that net income attributable to iQiyi grew to RMB655 million ($90.8 million), compared to RMB618 million in the same period in 2023. Revenues were RMB7.9 billion ($1.1 billion), a decrease of 5% year-on-year.

“We have been generating positive operating cash flow for eight consecutive quarters, and our balance sheet continued to improve,” said Wang Jun, the company’s chief financial officer.

Performance transparency, however, has recently been reduced. The company has ceased to disclose subscriber numbers, average monthly revenue per subscriber or even monthly active user numbers. And, while iQiyi has recently made play of building up its operations in Southeast Asia, it also chooses not to provide any geographical analysis of its subscribers, the value of its ex-China subscriptions or its overseas ad sales revenues.

In the first quarter, “membership services [subscriber] revenue was RMB4.8 billion ($665 million), decreasing 13% year over year,” the company said. Advertising sales were up 6% to RMB1.5 billion ($205 million), while content distribution revenue was RMB928 million ($129 million), increasing 27% year-on-year, “primarily driven by the distribution of several major titles,” the company said.

The company did not explain the decision to end disclosure of subscriber data, but said that the decrease in subscription revenue “was primarily due to the high base effect in the same period last year.”

This time last year iQiyi reported that its “average daily number of subscribing members excluding individuals with trial memberships for the [January-March] quarter was 128.1 million.”

By the end of 2023, it had lost a fifth of its members. “The average daily number of subscribing members excluding individuals with trial memberships for the [October to December] quarter was 99.5 million.”

Content costs as a component of cost of revenues were RMB4.0 billion ($554 million), decreasing 5% year over year. “The decrease in content cost was driven by our improvement in content strategy and operating efficiency,” the company said.

The company’s ADR-form shares jumped by 6% on Wednesday, ahead of the Thursday results announcement. At $5.16 apiece, the company has a market capitalization of $4.95 billion.