BEIJING, May 18, 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 first
quarter ended March 31, 2020.
First Quarter 2020 Highlights
- Total revenues were RMB7.6
billion (US$1.1
billion[1]),
representing a 9% increase from the same period in 2019.
- Operating loss was RMB2.2 billion
(US$316.6 million) and operating loss
margin was 29%, compared to operating loss of RMB2.0 billion and operating loss margin of 29%
in the same period in 2019.
- Net loss attributable to iQIYI was RMB2.9 billion (US$406.0
million), compared to net loss attributable to iQIYI of
RMB1.8 billion in the same period in
2019. Diluted net loss attributable to iQIYI per ADS was
RMB3.92 (US$0.56), compared to diluted net loss
attributable to iQIYI per ADS of RMB2.52 in the same period of 2019.
- The number of total subscribing members was 118.9 million as of
March 31, 2020, 99.2% of whom were
paying subscribing members. This compares to 96.8 million of total
subscribing members as of March 31,
2019, up 23% year over year.
"We delivered solid results during the first quarter despite
very challenging environment caused by the COVID-19 outbreak,"
commented Dr. Yu Gong, Founder,
Director, and Chief Executive Officer of iQIYI. "Total revenues
increased 9% year-over-year while user time spent and number of
subscribers both achieved robust growth, with subscribers reaching
119 million, an increase of 23% year-over-year and a net addition
of 12 million from previous quarter. The growth was driven by our
strong content offerings and audience's surging demand for digital
entertainment when sheltering in place amid the outbreak of
COVID-19, while our content cost continued to see moderate increase
compared to a year ago. We celebrated our 10-year anniversary last
month and look forward to further building out our comprehensive
content library and ecosystem, capitalizing on the deep value of
our original IPs and diversifying our monetization streams in the
decade ahead."
"We started off the year with solid financial and operational
performance spearheaded by our membership business," commented Mr.
Xiaodong Wang, Chief Financial
Officer of iQIYI. "We continued to optimize our membership system
and offer premium services in addition to achieving strong net
addition of subscribers during the first quarter. We are also
encouraged by the progress we have been making in building a more
balanced content mix, expanding our monetization initiatives and
exploring technology innovations that drive efficiency. With the
vast market potential of China's
digital entertainment market and the rationalizing content
production industry, we believe we are well positioned to navigate
through the pandemic and macro headwinds, and achieve long-term
sustainable growth."
Footnotes:
|
[1] Unless
otherwise noted, all translations from RMB to U.S. dollars are made
at a rate of RMB7.0808 to US$1.00, the exchange rate in effect as
of March 31, 2020 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.
|
First quarter 2020 Financial Results
Total revenues reached RMB7.6
billion (US$1.1 billion),
representing a 9% increase from the same period in 2019.
Membership services revenue was RMB4.6
billion (US$654.5 million),
representing a 35% increase from the same period in 2019. The
increase was primarily attributable to the growth in the number of
subscribing members, driven by our premium content and increased
entertainment demand during Chinese New Year holiday and the
COVID-19 pandemic.
Online advertising services revenue was RMB1.5 billion (US$217.0
million), representing a 27% decrease from the same period
in 2019. The decrease was primarily due to the challenging
macroeconomic environment in China
related to the COVID-19 pandemic.
Content distribution revenue was RMB602.8
million (US$85.1 million),
representing a 29% increase from the same period in 2019. The
growth was primarily attributable to the increase of high-quality
content which fulfilled distribution to several platforms during
the quarter.
Other revenues were RMB875.9
million (US$123.7 million),
representing a 9% decrease from the same period in 2019, primarily
due to the soft performance of certain business lines, partially
offset by the growth in game business.
Cost of revenues was RMB7.9
billion (US$1.1 billion),
representing an 9% increase from the same period in 2019, mainly
due to increased content costs this quarter. Content costs as a
component of cost of revenues were RMB5.9
billion (US$836.4 million),
representing a 11% increase from the same period in 2019.
Selling, general and administrative expenses were RMB1.3 billion (US$185.1
million), representing a 15% increase from the same period
in 2019. This was primarily due to higher marketing spending for
certain iQIYI apps and increased allowance for doubtful accounts
due to the COVID-19 pandemic.
Research and development expenses were RMB678.1 million (US$95.8
million), representing a 13% increase from the same period
in 2019, primarily due to the increase of personnel-related
compensation expenses.
Operating loss was RMB2.2 billion
(US$316.6 million), compared to
operating loss of RMB2.0 billion in
the same period in 2019. Operating loss margin was 29%, compared to
operating loss margin of 29% in the same period in 2019.
Total other expense was RMB628.5
million (US$88.8 million),
compared to total other income of RMB211.1
million during the same period of 2019. The year-over-year
variance was a combined result of the fluctuation of exchange rate
between Renminbi and the U.S. dollar and increased interest
expenses associated with our financing activities.
Loss before income taxes was RMB2.9
billion (US$405.4 million),
compared to loss before income taxes of RMB1.8 billion in the same period in 2019.
Income tax expense was RMB4.8
million (US$0.7 million),
compared to income tax expense of RMB7.4
million in the same period in 2019.
Net loss attributable to iQIYI was RMB2.9
billion (US$406.0 million),
compared to net loss attributable to iQIYI of RMB1.8 billion in the same period in 2019.
Diluted net loss attributable to iQIYI per ADS was RMB3.92 (US$0.56)
for the first quarter of 2020, compared to diluted net loss
attributable to iQIYI per ADS of RMB2.52 in the same period of 2019.
As of March 31, 2020, the Company
had cash, cash equivalents, restricted cash and short-term
investments of RMB9.9 billion
(US$1.4 billion).
Financial Guidance
For the second quarter of 2020, iQIYI expects total net revenues
to be between RMB7.25 billion
(US$1.02 billion) and RMB7.67 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
8:00 PM on May
18, 2020, U.S. Eastern Time (8:00
AM on May 19, 2020, Beijing
Time).
Please register in advance of the conference using the link
provided below. Upon registering, participant will receive dial-in
numbers, Direct Event passcode and unique registrant ID by
email.
Participant Online
Registration: http://apac.directeventreg.com/registration/event/5125109
It will automatically direct you to the registration page of
"iQIYI First Quarter 2020 Earnings Conference Call", where you may
fill in your details for RSVP. If it requires you to enter a
participant conference ID, please enter "5125109".
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 May 26, 2020.
Dial-in numbers for the replay are as follows:
International Dial-in
|
+61 2 8199
0299
|
Passcode:
|
5125109
|
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. iQIYI's platform features highly popular
original content, as well as a comprehensive library of other
professionally-produced content, professional user 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, talent agency, online literature
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
|
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
|
|
2019
|
|
2019
|
|
2020
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Revenues:
|
|
|
|
|
|
|
|
Membership
services
|
|
3,445,343
|
|
3,861,058
|
|
4,634,347
|
|
Online advertising
services
|
|
2,119,433
|
|
1,883,100
|
|
1,536,770
|
|
Content
distribution
|
|
467,861
|
|
878,044
|
|
602,772
|
|
Others
|
|
957,282
|
|
874,422
|
|
875,877
|
|
Total
revenues
|
|
6,989,919
|
|
7,496,624
|
|
7,649,766
|
|
|
|
|
|
|
|
|
|
Operating
costs and expenses:
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
(7,277,196)
|
|
(7,914,438)
|
|
(7,902,864)
|
|
Selling, general and
administrative
|
|
(1,140,611)
|
|
(1,399,529)
|
|
(1,310,603)
|
|
Research and
development
|
|
(598,072)
|
|
(711,262)
|
|
(678,135)
|
|
Total
operating costs and expenses
|
|
(9,015,879)
|
|
(10,025,229)
|
|
(9,891,602)
|
|
Operating
loss
|
|
(2,025,960)
|
|
(2,528,605)
|
|
(2,241,836)
|
|
|
|
|
|
|
|
|
|
Other
expense
|
|
|
|
|
|
|
|
Interest
income
|
|
65,097
|
|
89,833
|
|
56,594
|
|
Interest
expenses
|
|
(135,247)
|
|
(276,927)
|
|
(262,030)
|
|
Foreign exchange gain/
(loss), net
|
|
328,035
|
|
443,977
|
|
(312,422)
|
|
Loss from equity
method investments
|
|
(34,535)
|
|
(49,213)
|
|
(96,838)
|
|
Other expense,
net
|
|
(12,224)
|
|
(132,388)
|
|
(13,811)
|
|
Total other
income/(expense), net
|
|
211,126
|
|
75,282
|
|
(628,507)
|
|
|
|
|
|
|
|
|
|
Loss before
income taxes
|
|
(1,814,834)
|
|
(2,453,323)
|
|
(2,870,343)
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
(7,443)
|
|
(22,586)
|
|
(4,841)
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(1,822,277)
|
|
(2,475,909)
|
|
(2,875,184)
|
|
Less: Net
(loss)/income attributable to noncontrolling
interests
|
|
(8,301)
|
|
17,876
|
|
(542)
|
|
Net loss
attributable to iQIYI, Inc.
|
|
(1,813,976)
|
|
(2,493,785)
|
|
(2,874,642)
|
|
Accretion of
redeemable noncontrolling interests
|
|
-
|
|
(1,542)
|
|
(1,717)
|
|
Net loss
attributable to ordinary shareholders
|
|
(1,813,976)
|
|
(2,495,327)
|
|
(2,876,359)
|
|
|
|
|
|
|
|
|
|
Net loss per share
for Class A and Class B ordinary
shares:
|
|
|
|
|
|
|
|
Basic
|
|
(0.36)
|
|
(0.49)
|
|
(0.56)
|
|
Diluted
|
|
(0.36)
|
|
(0.49)
|
|
(0.56)
|
|
|
|
|
|
|
|
|
|
Net loss per
ADS (1 ADS equals 7 Class A ordinary
shares):
|
|
|
|
|
|
|
|
Basic
|
|
(2.52)
|
|
(3.43)
|
|
(3.92)
|
|
Diluted
|
|
(2.52)
|
|
(3.43)
|
|
(3.92)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of Class A and Class B
ordinary shares used in net loss per share
computation:
|
|
|
|
|
|
|
|
Basic
|
|
5,083,030,810
|
|
5,123,416,747
|
|
5,137,428,818
|
|
Diluted
|
|
5,083,030,810
|
|
5,123,416,747
|
|
5,137,428,818
|
|
|
|
|
|
|
|
|
|
iQIYI,
INC.
|
Condensed
Consolidated Balance Sheets
|
(In RMB thousands,
except for number of shares and per share data)
|
|
|
|
December
31,
|
|
March
31,
|
|
|
2019
|
|
2020
|
|
|
RMB
|
|
RMB
|
|
|
|
|
(Unaudited)
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
5,934,742
|
|
3,692,920
|
Restricted
cash
|
|
974,932
|
|
988,156
|
Short-term
investments
|
|
4,579,313
|
|
5,258,526
|
Accounts
receivable
|
|
3,627,749
|
|
4,310,615
|
Prepayments and other
assets
|
|
3,719,228
|
|
3,422,752
|
Amounts due from
related parties
|
|
211,993
|
|
269,454
|
Licensed copyrights,
net
|
|
1,224,881
|
|
1,432,955
|
Total current assets
|
|
20,272,838
|
|
19,375,378
|
|
|
|
|
|
Non-current assets:
|
|
|
|
|
Fixed assets,
net
|
|
1,754,367
|
|
1,663,533
|
Long-term
investments
|
|
2,982,154
|
|
3,460,325
|
Deferred tax
assets, net
|
|
34,916
|
|
34,916
|
Licensed
copyrights, net
|
|
6,287,330
|
|
5,937,890
|
Intangible
assets, net
|
|
813,960
|
|
799,731
|
Produced
content, net
|
|
4,355,221
|
|
4,507,880
|
Prepayments and
other assets
|
|
3,508,476
|
|
2,723,251
|
Operating lease
assets
|
|
722,742
|
|
904,188
|
Goodwill
|
|
3,888,346
|
|
3,888,346
|
Amounts due from
related parties
|
|
172,200
|
|
245,700
|
Total non-current assets
|
|
24,519,712
|
|
24,165,760
|
|
|
|
|
|
Total
assets
|
|
44,792,550
|
|
43,541,138
|
|
|
|
|
|
LIABILITIES,
REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts and notes
payable
|
|
8,212,449
|
|
8,328,921
|
Amounts due to related
parties
|
|
1,604,258
|
|
1,906,111
|
Customer advances and
deferred revenue
|
|
3,081,407
|
|
3,309,262
|
Short-term
loans
|
|
2,618,170
|
|
2,572,484
|
Long-term loans,
current portion
|
|
736,814
|
|
745,800
|
Operating lease
liabilities, current portion
|
|
125,412
|
|
175,410
|
Accrued expenses and
other liabilities
|
|
3,794,656
|
|
3,839,707
|
Total current liabilities
|
|
20,173,166
|
|
20,877,695
|
Non-current
liabilities:
|
|
|
|
|
Long-term
loans
|
|
880,278
|
|
879,790
|
Convertible senior
notes
|
|
12,296,868
|
|
12,611,230
|
Deferred tax
liabilities
|
|
30,136
|
|
16,581
|
Amounts due to related
parties
|
|
1,061,883
|
|
1,027,477
|
Operating lease
liabilities
|
|
402,732
|
|
515,838
|
Other non-current
liabilities
|
|
232,555
|
|
237,997
|
Total non-current liabilities
|
|
14,904,452
|
|
15,288,913
|
|
|
|
|
|
Total
liabilities
|
|
35,077,618
|
|
36,166,608
|
|
|
|
|
|
Redeemable
noncontrolling interests:
|
|
101,542
|
|
103,259
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
|
Class A ordinary
shares
|
|
142
|
|
143
|
Class B ordinary
shares
|
|
183
|
|
183
|
Additional paid-in
capital
|
|
41,298,328
|
|
41,620,013
|
Accumulated
deficit
|
|
(33,834,357)
|
|
(36,729,492)
|
Accumulated other
comprehensive income
|
|
2,106,718
|
|
2,341,740
|
Non-controlling
interests
|
|
42,376
|
|
38,684
|
Total
shareholders' equity
|
|
9,613,390
|
|
7,271,271
|
|
|
|
|
|
Total liabilities,
redeemable noncontrolling interests and shareholders'
equity
|
|
44,792,550
|
|
43,541,138
|
View original
content:http://www.prnewswire.com/news-releases/iqiyi-announces-first-quarter-2020-financial-results-301060858.html
SOURCE iQIYI, Inc.