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BEIJING, May 26, 2022 /PRNewswire/ — iQIYI, Inc. (Nasdaq: IQ) (“iQIYI” or the “Company”), an innovative market-leading online entertainment service in China, today announced its unaudited financial results for the first quarter ended March 31, 2022.
First Quarter 2022 Highlights
- Total revenues were RMB7.3 billion (US$1.1 billion1), decreasing 9% year over year.
- Membership services revenue was RMB4.5 billion (US$705.4 million), increasing 4% year over year.
- Operating income was RMB93.4 million (US$14.7 million) and operating income margin was 1%, compared to operating loss of RMB1.0 billion and operating loss margin of 13% in the same period in 2021.
- Non-GAAP operating income2 was RMB326.6 million (US$51.5 million) and non-GAAP operating income margin was 4%, compared to non-GAAP operating loss of RMB658.2 million and non-GAAP operating loss margin of 8% in the same period in 2021.
- Net income attributable to iQIYI was RMB169.1 million (US$26.7 million), compared to net loss attributable to iQIYI of RMB1.3 billion in the same period in 2021.
- Non-GAAP net income attributable to iQIYI2 was RMB162.2 million (US$25.6 million), compared to non-GAAP net loss attributable to iQIYI of RMB1.0 billion in the same period in 2021.
“During the first quarter of 2022, we delivered a select portfolio of premium shows, bringing membership services growth; we improved our operating efficiency, leading to margin expansion and profits. Our new strategy cemented our market leadership while yielding healthy financial performance.” commented Mr. Yu Gong, Founder, Director, and Chief Executive Officer of iQIYI. “Going forward, we will adhere to the same strategy, which will create value for all stakeholders within our ecosystem, including our users and our shareholders.”
“Our gross margin consistently expanded in the last three quarters, and reached a historical high in the first quarter of 2022. Our operating expenses on the other hand decreased consistently in the last three quarters as well.” commented Mr. Jun Wang, Chief Financial Officer of iQIYI. “Behind these numbers are our unyielding efforts in improving operational efficiency and scalability to better position ourselves for the growth opportunities in long run.”
First Quarter 2022 Financial Highlights
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Three Months Ended |
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(Amounts in thousands of Renminbi (“RMB”), except for number |
March 31, |
December 31, |
March 31, |
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2021 |
2021 |
2022 |
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RMB |
RMB |
RMB |
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Total revenues |
7,968,423 |
7,388,558 |
7,277,059 |
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Operating (loss)/income |
(1,014,211) |
(975,227) |
93,413 |
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Operating (loss)/income (non-GAAP) |
(658,178) |
(515,539) |
326,555 |
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Net (loss)/income attributable to iQIYI, Inc. |
(1,267,010) |
(1,775,787) |
169,093 |
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Net (loss)/income attributable to iQIYI, Inc. (non-GAAP) |
(1,020,459) |
(1,001,851) |
162,189 |
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Diluted net (loss)/income per ADS |
(1.61) |
(2.24) |
0.21 |
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Diluted net (loss)/income per ADS (non-GAAP)2 |
(1.30) |
(1.26) |
0.20 |
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First Quarter 2022 Other Operating Highlights
- The average daily number of total subscribing members3 for the quarter was 101.4 million, compared to 105.4 million for the same period in 2021 and 97.0 million for the fourth quarter in 2021. The average daily number of subscribing members excluding individuals with trial memberships4 for the quarter was 100.8 million, compared to 104.3 million for the same period in 2021 and 96.4 million for the fourth quarter in 2021.
- The monthly average revenue per membership (ARM5) for the first quarter was RMB14.69, compared to RMB13.64 for the same period in 2021 and RMB14.16 for the fourth quarter in 2021, increasing 8% year over year and 4% quarter over quarter.
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Footnotes: |
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[1] Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB6.3393 as of March 31, 2022, as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. Translations are provided solely for the convenience of the reader. |
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[2] Non-GAAP measures are defined in the Non-GAAP Financial Measures section (see also “Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures” for more details). |
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[3] The average daily number of total subscribing members for a quarter is calculated by averaging the number of total subscribing members in each day of such quarter. |
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[4] The average daily number of subscribing members excluding individuals with trial memberships for the quarter is calculated by averaging the number of subscribing members excluding individuals with trial memberships in each day of such quarter. |
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[5] The monthly ARM for the quarter is calculated by dividing our total revenues from membership services during a given quarter by the average daily number of total subscribing members for that quarter and the number of months in the quarter. |
First Quarter 2022 Financial Results
Total revenues reached RMB7.3 billion (US$1.1 billion), decreasing 9% year over year.
Membership services revenue was RMB4.5 billion (US$705.4 million), increasing 4% year over year, primarily attributable to the increase in ARM, as we launched a variety of premium content that elevated user experiences.
Online advertising services revenue was RMB1.3 billion (US$211.0 million), decreasing 30% year over year, primarily due to challenging macroeconomic environment and our new strategy leading to fewer number of variety shows launched.
Content distribution revenue was RMB626.1 million (US$98.8 million), decreasing 20% year over year, primarily due to the decrease in the value of barter transactions.
Other revenues were RMB842.2 million (US$132.8 million), decreasing 12% year over year, primarily due to the soft performance of various business lines.
Cost of revenues was RMB6.0 billion (US$940.8 million), decreasing 16% year over year, primarily due to lower content costs during the quarter. Content costs as a component of cost of revenues were RMB4.4 billion (US$693.5 million), decreasing 19% year over year. The decrease in content cost resulted from our improvement in content strategy, fewer number of variety shows launched, and improvement in operating efficiency.
Selling, general and administrative expenses were RMB744.8 million (US$117.5 million), decreasing 38% year over year, primarily due to a decrease in marketing spending, personnel-related compensation expenses, share-based compensation expenses, and to a lesser extent of RMB90.8 million (US$14.3 million) government subsidies received as a reduction to the designated operating expenses.
Research and development expenses were RMB475.0 million (US$74.9 million), decreasing 29% year over year, primarily due to the decrease of personnel-related compensation expenses.
Operating income was RMB93.4 million (US$14.7 million), compared to operating loss of RMB1.0 billion in the same period in 2021. Operating income margin was 1%, compared to operating loss margin of 13% in the same period in 2021. Non-GAAP operating income was RMB326.6 million (US$51.5 million) and non-GAAP operating income margin was 4%, compared to non-GAAP operating loss of RMB658.2 million and non-GAAP operating loss margin of 8% in the same period in 2021.
Total other income was RMB97.3 million (US$15.4 million), compared to total other expense of RMB222.4 million during the same period of 2021. The year over year variance was a combination of the disposal gain derived from deconsolidation due to change in control of subsidiaries, impairment of long-term investments, and decreased interest expenses of RMB155.1 million (US$24.5 million) mainly due to the adoption of ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity and less principal amount of convertible bond.
Income before income taxes was RMB190.7 million (US$30.1 million), compared to loss before income taxes of RMB1.2 billion in the same period in 2021.
Income tax expense was RMB16.9 million (US$2.7 million), compared to income tax expense of RMB20.6 million in the same period in 2021.
Net income attributable to iQIYI was RMB169.1 million (US$26.7 million), compared to net loss attributable to iQIYI of RMB1.3 billion in the same period in 2021. Diluted net income attributable to iQIYI per ADS was RMB0.21 (US$0.03) for the first quarter of 2022, compared to diluted net loss attributable to iQIYI per ADS of RMB1.61 in the same period of 2021. Non-GAAP net income attributable to iQIYI was RMB162.2 million (US$25.6 million), compared to non-GAAP net loss attributable to iQIYI of RMB1.0 billion in the same period in 2021. Non-GAAP diluted net income attributable to iQIYI per ADS was RMB0.20 (US$0.03), compared to non-GAAP diluted net loss attributable to iQIYI per ADS of RMB1.30 in the same period of 2021.
As of March 31, 2022, the Company had cash, cash equivalents, restricted cash and short-term investments of RMB5.2 billion (US$814.8 million).
Conference Call Information
iQIYI’s management will hold an earnings conference call at 7:00 AM on May 26, 2022, U.S. Eastern Time (7:00 PM on May 26, 2022, Beijing Time).
Please register in advance of the conference using the link provided below. Upon registering, you will be provided with participant dial-in numbers, Direct Event passcode and unique registrant ID by email.
Participant Online Registration:
http://apac.directeventreg.com/registration/event/5885486
It will automatically direct you to the registration page of “iQIYI First Quarter 2022 Earnings Conference Call”, where you may fill in your details for RSVP. If it requires you to enter a participant conference ID, please enter “5885486“.
In the 10 minutes prior to the call start time, you may use the conference access information (including dial-in number(s), Direct Event passcode and unique registrant ID) provided in the confirmation email that you have received following your pre-registration.
A telephone replay of the call will be available after the conclusion of the conference call through June 3, 2022.
Dial-in numbers for the replay are as follows:
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International Dial-in |
+61 2 8199 0299 |
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Passcode: |
5885486 |
A live and archived webcast of the conference call will be available at http://ir.iqiyi.com/.
About iQIYI, Inc.
iQIYI, Inc. is an innovative market-leading online entertainment service in China. Its corporate DNA combines creative talent with technology, fostering an environment for continuous innovation and the production of blockbuster content. We produce, aggregate and distribute a wide variety of professionally produced content, or PPC, as well as a broad spectrum of other video content in a variety of formats. The Company distinguishes itself in the online entertainment industry by its leading technology platform powered by advanced AI, big data analytics and other core proprietary technologies. iQIYI attracts a massive user base with tremendous user…
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