BEIJING, Feb. 27, 2020 /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 fourth quarter and fiscal year ended December 31, 2019.
Fourth Quarter 2019 Highlights
● Total revenues were RMB7.5
billion (US$1.1 billion[1]),
representing a 7% increase from the same period in 2018.
● Operating loss was RMB2.5
billion (US$363.2 million) and
operating loss margin was 34%, compared to operating loss of
RMB3.3 billion and operating loss
margin of 47% in the same period in 2018.
● Net loss attributable to iQIYI was RMB2.5 billion (US$358.2
million), compared to net loss attributable to iQIYI of
RMB3.5 billion in the same period in
2018. Diluted net loss attributable to iQIYI per ADS was
RMB3.43 (US$0.49), compared to diluted net loss
attributable to iQIYI per ADS of RMB4.83 in the same period of 2018.
● The number of total subscribing members was 106.9
million as of December 31, 2019,
98.9% of whom were paying subscribing members. This compares to
87.4 million of total subscribing members as of December 31, 2018, up 22% year over year.
Fiscal Year 2019 Highlights
● Total revenues were RMB29.0
billion (US$4.2 billion),
representing a 16% increase from 2018.
● Operating loss was RMB9.3
billion (US$1.3 billion) and
operating loss margin was 32%, compared to operating loss of
RMB8.3 billion and operating loss
margin of 33% in 2018.
● Net loss attributable to iQIYI was RMB10.3 billion (US$1.5
billion), compared to net loss attributable to iQIYI of
RMB9.1 billion in 2018. Diluted net
loss attributable to iQIYI per ADS was RMB14.14 (US$2.03),
compared to diluted net loss attributable to iQIYI per ADS of
RMB17.01 in 2018.
"We ended 2019 on a solid note with total revenues for the
fourth quarter and full year coming in at RMB7.5 billion and RMB29.0
billion, respectively, while content cost only went up by a
single digit percentage on full year basis with optimized content
structure," commented Dr. Yu
Gong, Founder, Director and Chief Executive Officer of
iQIYI. "Growing 36% in 2019, membership business continued to
spearhead our overall growth throughout the year, driven by the
increasing number of total subscribing members which reached 107
million at year end. As we continued to build our comprehensive
content library and capitalize on the deep value of our original
IPs, our diversified monetization strategy is gradually bearing
fruit with other revenues growing 30% year over year and accounting
for a record 13% of our total full-year revenues. Facing the
dawn of a new decade, we look forward to the enormous opportunities
ahead of us with the approaching 5G commercial adoption and
continuous AI technology innovation. We believe the rising
willingness of Chinese users to pay for premium content combined
with their access to more convenient payment methods, will create
significant potential for our business. We are more confident than
ever in our content ecosystem and product matrix, which position us
well to capture the growth prospects in 2020 and beyond."
"We are pleased to report a set of solid financial and operating
performance for the fourth quarter and full year 2019," commented
Mr. Xiaodong Wang, Chief Financial
Officer of iQIYI. "In addition to our healthy and more diversified
top-line growth, our content costs trended lower as a
percentage of total revenues in 2019, which is an encouraging sign
of our more balanced content mix and rationalized competition
landscape. Going forward, we will continue to make smart and
disciplined investments in our content, especially original
content, as well as our technology innovations, which form the
core of our strategy to achieve long-term growth and drive
sustainable value for our shareholders."
Footnotes:
|
[1] Unless
otherwise noted, all translations from RMB to U.S. dollars are made
at a rate of RMB6.9618 to US$1.00, the exchange rate in effect as
of December 31, 2019 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.
|
Fourth quarter 2019 Financial Results
Total revenues reached RMB7.5
billion (US$1.1 billion),
representing a 7% increase from the same period in 2018.
Membership services revenue was RMB3.9
billion (US$554.6 million),
representing a 21% increase from the same period in 2018. The
increase was primarily attributable to the growth in the number of
subscribing members, driven by our premium content and various
operational initiatives during the quarter.
Online advertising services revenue was RMB1.9 billion (US$270.5
million), representing a 15% decrease from the same period
in 2018. The decrease was primarily due to the challenging
macroeconomic environment in China.
Content distribution revenue was RMB878.0
million (US$126.1 million),
representing a 68% increase from the same period in 2018. The
growth was driven by both the higher volume and increased
contractual price of the titles we distributed during the
quarter.
Other revenues were RMB874.4
million (US$125.6 million),
representing a 21% decrease from the same period in 2018, primarily
due to the soft performance of certain business lines, partially
offset by strong growth in game business.
Cost of revenues was RMB7.9
billion (US$1.1 billion),
representing a 7% decrease from the same period in 2018. The
decrease was primarily due to lower content costs this quarter,
partially offset by the increase of other cost items. Content costs
as a component of cost of revenues were RMB5.7 billion (US$814.7
million), representing a 13% decrease from the same period
in 2018. This was a combined result of certain major titles being
launched late in the quarter, as well as less expenses recorded
relating to original content.
Selling, general and administrative expenses were RMB1.4 billion (US$201.0
million), representing a 15% increase from the same period
in 2018. This was primarily due to higher marketing spending for
certain iQIYI apps, as well as increased sales and marketing
expenses of game business.
Research and development expenses were RMB711.3 million (US$102.2
million), representing a 17% increase from the same period
in 2018, primarily due to the increase of personnel-related
compensation expenses.
Operating loss was RMB2.5 billion
(US$363.2 million), compared to
operating loss of RMB3.3 billion in
the same period in 2018. Operating loss margin was 34%, compared to
operating loss margin of 47% in the same period in 2018.
Total other income was RMB75.3
million (US$10.8 million),
compared to total other expense of RMB34.8
million during the same period of 2018. The year-over-year
variance was a combined result of the foreign exchange gain due to
the fluctuation of exchange rate between Renminbi and the U.S.
dollar, increased interest expenses associated with our financing
activities, as well as the impairment loss for certain private
company investments.
Loss before income taxes was RMB2.5
billion (US$352.4 million),
compared to loss before income taxes of RMB3.4 billion in the same period in 2018.
Income tax expense was RMB22.6
million (US$3.2 million),
compared to income tax expense of RMB79.5
million in the same period in 2018.
Net loss attributable to iQIYI was RMB2.5
billion (US$358.2 million),
compared to net loss attributable to iQIYI of RMB3.5 billion in the same period in 2018.
Diluted net loss attributable to iQIYI per ADS was RMB3.43 (US$0.49)
for the fourth quarter of 2019, compared to diluted net loss
attributable to iQIYI per ADS of RMB4.83 in the same period of 2018.
As of December 31, 2019, the
Company had cash, cash equivalents, restricted cash and short-term
investments of RMB11.5 billion
(US$1.7 billion).
Fiscal Year 2019 Financial Results
Total revenues reached RMB29.0
billion (US$4.2 billion),
representing a 16% increase from 2018.
Membership services revenue was RMB14.4
billion (US$2.1 billion),
representing a 36% increase from 2018. The increase was primarily
attributable to the strong growth in the number of subscribing
members, driven by our premium content and various operational
initiatives during the year.
Online advertising services revenue was RMB8.3 billion (US$1.2
billion), representing a 11% decrease from 2018. The
decrease was primarily due to the challenging macroeconomic
environment in China, the
uncertainty of certain content scheduling, and the intensified
competition in advertising business.
Content distribution revenue was RMB2.5
billion (US$365.5 million),
representing a 18% increase from 2018. The growth was primarily
attributable to a number of premium content titles that we
distributed during the year.
Other revenues were RMB3.7 billion
(US$537.7 million), representing a
30% increase from 2018. The increase was driven by the growth of a
number of business verticals, especially the robust growth of our
game business after the acquisition of Skymoons.
Cost of revenues was RMB30.3
billion (US$4.4 billion),
representing a 12% increase from 2018. The increase was primarily
driven by higher content costs and other cost items. Content
costs as a component of cost of revenues were RMB22.2 billion (US$3.2
billion), representing a 6% increase from 2018.
Selling, general and administrative expenses were RMB5.2 billion (US$752.1
million), representing a 26% increase from 2018. This was
primarily due to increased sales and marketing expenses related to
certain iQIYI apps and our game business, as well as higher
share-based and personnel-related compensation expenses.
Research and development expenses were RMB2.7 billion (US$383.1
million), representing a 34% increase from 2018, primarily
due to the increase of personnel-related compensation expenses.
Operating loss was RMB9.3 billion
(US$1.3 billion), compared to
operating loss of RMB8.3 billion in
2018. Operating loss margin was 32%, compared to operating loss
margin of 33% in 2018.
Total other expense was RMB967.1
million (US$138.9 million),
compared to total other expense of RMB676.2
million during 2018. The year-over-year variance was a
combined result of increased interest expenses associated with our
financing activities, the foreign exchange fluctuation between
Renminbi and the U.S. dollar, as well as the impairment loss and
lower fair value gain for private company investments.
Loss before income taxes was RMB10.2
billion (US$1.5 billion),
compared to loss before income taxes of RMB9.0 billion in 2018.
Income tax expense was RMB51.9
million (US$7.4 million),
compared to income tax expense of RMB78.8
million in 2018.
Net loss attributable to iQIYI was RMB10.3 billion (US$1.5
billion), compared to net loss attributable to iQIYI of
RMB9.1 billion in 2018. Diluted net
loss attributable to iQIYI per ADS was RMB14.14 (US$2.03)
for 2019, compared to diluted net loss attributable to iQIYI per
ADS of RMB17.01 in 2018.
Financial Guidance
For the first quarter of 2020, iQIYI expects total net revenues
to be between RMB7.10 billion
(US$1.02 billion) and RMB7.52 billion (US$1.08
billion), representing a 2% to 8% increase from the same
period in 2019. This forecast reflects iQIYI's current and
preliminary view, which is subject to substantial uncertainty.
Conference Call Information
iQIYI's management will hold an earnings conference call at
7:00 PM on February 27, 2020, U.S. Eastern Time
(8:00 AM on February 28, 2020, Beijing Time). Dial-in details
for the earnings conference call are as follows:
International
+65 67135090
China
4006 208038
US
+1 845 675 0437
UK
+44 2036 214779
Hong Kong
+852 3018 6771
Passcode: 1568235
A telephone replay of the call will be available two hours after
the conclusion of the conference call through March 6, 2020.
Dial-in numbers for the replay are as follows:
International Dial-in
+61 2 8199 0299
Passcode: 1568235
A live and archived webcast of this 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. iQIYI's platform features highly popular
original content, as well as a comprehensive library of other
professionally-produced content, partner-generated content and
user-generated content. 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 engagement, and has developed a diversified
monetization model including membership services, online
advertising services, content distribution, online games, live
broadcasting, IP licensing, online literature, talent agency and
e-commerce etc.
Safe Harbor Statement
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
"will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates," "confident" and similar statements. Among
other things, the Financial Guidance and quotations from management
in this announcement, as well as iQIYI's strategic and operational
plans, contain forward-looking statements. iQIYI may also make
written or oral forward-looking statements in its periodic reports
to the U.S. Securities and Exchange Commission, in its annual
report to shareholders, in press releases and other written
materials and in oral statements made by its officers, directors or
employees to third parties. Statements that are not historical
facts, including but not limited to statements about iQIYI's
beliefs and expectations, are forward-looking statements.
Forward-looking statements involve inherent risks and
uncertainties. A number of factors could cause actual results to
differ materially from those contained in any forward-looking
statement, including but not limited to the following: iQIYI's
strategies; iQIYI's future business development, financial
condition and results of operations; iQIYI's ability to retain and
increase the number of users, members and advertising customers,
and expand its service offerings; competition in the online
entertainment industry; changes in iQIYI's revenues, costs or
expenditures; Chinese governmental policies and regulations
relating to the online entertainment industry, general economic and
business conditions globally and in China and assumptions underlying or related to
any of the foregoing. Further information regarding these and other
risks is included in the Company's filings with the Securities and
Exchange Commission. All information provided in this press release
and in the attachments is as of the date of the press release, and
iQIYI undertakes no duty to update such information, except as
required under applicable law.
For more information, please contact:
Investor Relations
iQIYI, Inc.
+86 10 8264 6585
ir@qiyi.com
iQIYI,
INC.
Condensed
Consolidated Statements of Income
(In RMB
thousands, except for number of shares and per share
data)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
|
2018
|
|
2019
|
|
2019
|
|
2018
|
|
2019
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
(Unaudited)
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Membership
services
|
|
3,200,981
|
|
3,716,861
|
|
3,861,058
|
|
10,622,769
|
|
14,435,611
|
Online advertising
services
|
|
2,203,637
|
|
2,067,385
|
|
1,883,100
|
|
9,328,061
|
|
8,270,600
|
Content
distribution
|
|
522,038
|
|
680,377
|
|
878,044
|
|
2,162,643
|
|
2,544,221
|
Others
|
|
1,100,666
|
|
932,311
|
|
874,422
|
|
2,875,643
|
|
3,743,226
|
Total
revenues
|
|
7,027,322
|
|
7,396,934
|
|
7,496,624
|
|
24,989,116
|
|
28,993,658
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
(8,522,761)
|
|
(8,175,751)
|
|
(7,914,438)
|
|
(27,132,811)
|
|
(30,348,342)
|
Selling, general and
administrative
|
|
(1,221,681)
|
|
(1,349,543)
|
|
(1,399,529)
|
|
(4,167,889)
|
|
(5,236,007)
|
Research and
development
|
|
(607,468)
|
|
(703,211)
|
|
(711,262)
|
|
(1,994,652)
|
|
(2,667,146)
|
Total
operating costs and expenses
|
|
(10,351,910)
|
|
(10,228,505)
|
|
(10,025,229)
|
|
(33,295,352)
|
|
(38,251,495)
|
Operating
loss
|
|
(3,324,588)
|
|
(2,831,571)
|
|
(2,528,605)
|
|
(8,306,236)
|
|
(9,257,837)
|
|
|
|
|
|
|
|
|
|
|
|
Other
expense
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
118,025
|
|
116,494
|
|
89,833
|
|
213,969
|
|
402,145
|
Interest
expenses
|
|
(61,238)
|
|
(254,435)
|
|
(276,927)
|
|
(94,711)
|
|
(914,371)
|
Foreign exchange
(loss)/gain, net
|
|
(73,836)
|
|
(656,105)
|
|
443,977
|
|
(970,796)
|
|
(190,210)
|
Loss from equity
method investments
|
|
(16,016)
|
|
(33,213)
|
|
(49,213)
|
|
(16,965)
|
|
(155,073)
|
Other
(expense)/income, net
|
|
(1,686)
|
|
478
|
|
(132,388)
|
|
192,309
|
|
(109,541)
|
Total other
(expense)/income, net
|
|
(34,751)
|
|
(826,781)
|
|
75,282
|
|
(676,194)
|
|
(967,050)
|
|
|
|
|
|
|
|
|
|
|
|
Loss before
income taxes
|
|
(3,359,339)
|
|
(3,658,352)
|
|
(2,453,323)
|
|
(8,982,430)
|
|
(10,224,887)
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
(79,492)
|
|
(16,047)
|
|
(22,586)
|
|
(78,801)
|
|
(51,852)
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(3,438,831)
|
|
(3,674,399)
|
|
(2,475,909)
|
|
(9,061,231)
|
|
(10,276,739)
|
Less: Net
income attributable to noncontrolling interests
|
|
37,888
|
|
13,724
|
|
17,876
|
|
48,545
|
|
46,590
|
Net loss
attributable to iQIYI, Inc.
|
|
(3,476,719)
|
|
(3,688,123)
|
|
(2,493,785)
|
|
(9,109,776)
|
|
(10,323,329)
|
Accretion of
redeemable convertible preferred shares
|
|
-
|
|
-
|
|
-
|
|
(298,990)
|
|
-
|
Accretion of
redeemable noncontrolling interests
|
|
-
|
|
-
|
|
(1,542)
|
|
-
|
|
(1,542)
|
Net loss
attributable to ordinary shareholders
|
|
(3,476,719)
|
|
(3,688,123)
|
|
(2,495,327)
|
|
(9,408,766)
|
|
(10,324,871)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
for Class A and Class B ordinary shares:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
(0.69)
|
|
(0.72)
|
|
(0.49)
|
|
(2.43)
|
|
(2.02)
|
Diluted
|
|
(0.69)
|
|
(0.72)
|
|
(0.49)
|
|
(2.43)
|
|
(2.02)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per
ADS (1 ADS equals 7 Class A ordinary
shares):
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
(4.83)
|
|
(5.04)
|
|
(3.43)
|
|
(17.01)
|
|
(14.14)
|
Diluted
|
|
(4.83)
|
|
(5.04)
|
|
(3.43)
|
|
(17.01)
|
|
(14.14)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of Class A and Class B
ordinary shares
used in net loss per share computation:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
5,069,616,758
|
|
5,109,395,926
|
|
5,123,416,747
|
|
3,867,931,786
|
|
5,104,882,400
|
Diluted
|
|
5,069,616,758
|
|
5,109,395,926
|
|
5,123,416,747
|
|
3,867,931,786
|
|
5,104,882,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iQIYI,
INC.
Condensed
Consolidated Balance Sheets
(In RMB thousands,
except for number of shares and per share data)
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
2018
|
|
2019
|
|
|
RMB
|
|
RMB
|
|
|
|
|
(Unaudited)
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
4,586,405
|
|
5,934,742
|
Restricted
cash
|
|
2,174,042
|
|
974,932
|
Short-term
investments
|
|
6,061,832
|
|
4,579,313
|
Accounts
receivable
|
|
2,889,234
|
|
3,627,749
|
Prepayments and other
assets
|
|
2,696,381
|
|
3,719,228
|
Amounts due from
related parties
|
|
281,710
|
|
211,993
|
Licensed copyrights,
net
|
|
1,163,839
|
|
1,224,881
|
Total current assets
|
|
19,853,443
|
|
20,272,838
|
|
|
|
|
|
Non-current assets:
|
|
|
|
|
Fixed assets,
net
|
|
1,618,147
|
|
1,754,367
|
Long-term
investments
|
|
2,572,040
|
|
2,982,154
|
Deferred tax
assets, net
|
|
23,873
|
|
34,916
|
Licensed
copyrights, net
|
|
6,640,910
|
|
6,287,330
|
Intangible
assets, net
|
|
1,678,193
|
|
813,960
|
Produced
content, net
|
|
3,736,063
|
|
4,355,221
|
Prepayments and
other assets
|
|
4,695,883
|
|
3,508,476
|
Operating lease
assets
|
|
-
|
|
722,742
|
Goodwill
|
|
3,888,346
|
|
3,888,346
|
Amounts due from
related parties
|
|
52,800
|
|
172,200
|
Total non-current assets
|
|
24,906,255
|
|
24,519,712
|
|
|
|
|
|
Total
assets
|
|
44,759,698
|
|
44,792,550
|
|
|
|
|
|
LIABILITIES,
MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts and notes
payable
|
|
10,162,366
|
|
8,212,449
|
Amounts due to related
parties
|
|
692,390
|
|
1,604,258
|
Customer advances and
deferred revenue
|
|
2,195,283
|
|
3,081,407
|
Short-term
loans
|
|
3,046,449
|
|
2,618,170
|
Long-term loans,
current portion
|
|
83,720
|
|
736,814
|
Operating lease
liabilities, current portion
|
|
-
|
|
125,412
|
Accrued expenses and
other liabilities
|
|
3,632,148
|
|
3,794,656
|
Total current liabilities
|
|
19,812,356
|
|
20,173,166
|
Non-current
liabilities:
|
|
|
|
|
Long-term
loans
|
|
644,169
|
|
880,278
|
Convertible senior
notes
|
|
4,712,284
|
|
12,296,868
|
Deferred tax
liabilities
|
|
96,405
|
|
30,136
|
Amounts due to related
parties
|
|
1,281,370
|
|
1,061,883
|
Operating lease
liabilities
|
|
-
|
|
402,732
|
Other non-current
liabilities
|
|
57,551
|
|
232,555
|
Total non-current liabilities
|
|
6,791,779
|
|
14,904,452
|
|
|
|
|
|
Total
liabilities
|
|
26,604,135
|
|
35,077,618
|
|
|
|
|
|
Redeemable
noncontrolling interests:
|
|
-
|
|
101,542
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
|
Class A ordinary
shares
|
|
138
|
|
142
|
Class B ordinary
shares
|
|
183
|
|
183
|
Additional paid-in
capital
|
|
39,666,150
|
|
41,298,328
|
Accumulated
deficit
|
|
(23,509,486)
|
|
(33,834,357)
|
Accumulated other
comprehensive income
|
|
1,879,946
|
|
2,106,718
|
Non-controlling
interests
|
|
118,632
|
|
42,376
|
Total
shareholders' equity
|
|
18,155,563
|
|
9,613,390
|
|
|
|
|
|
Total liabilities,
mezzanine equity and shareholders' equity
|
|
44,759,698
|
|
44,792,550
|
View original
content:http://www.prnewswire.com/news-releases/iqiyi-announces-fourth-quarter-and-fiscal-year-2019-financial-results-301012720.html
SOURCE iQIYI, Inc.