iQIYI, Inc. Q4 FY2024 earnings call

• Starting from late November, significant rebound in business performance across metrics like subscribing members and user time spent, boosted by top-tier content.
• Focus on improving long-form video content quality and share, expanding mini-drama business for ad revenue growth.
• Reclassified membership offerings to better cater to user needs, including individual and family categories.
• Advanced technology in video production, leveraging AI and virtual production.
• Overseas business showing solid performance, planning to expand into new markets while maintaining profitability.

Long-form videos

• Sustained leadership in core drama category, capturing highest total viewership market share in Q4 and full year 2024 according to Enlighten Data. Dominance in suspense genres remained unchallenged, with titles like 'Terminal Place' breaking 10,000 iQIYI popularity index and 'Flagship [Foreign Language] brand' surpassing 10,000 in 6 days.

Movies

• Maintained leading viewership for self-conducted partners in Q4. Original production 'Frozen Wind' was best performing comedy movie on the platform. Notable releases like 'Upstream' and '[Foreign Language] The Battle of Life and Death' secured top positions.

Mini drama

• Revamped apps: iQIYI main app focuses on subscription-based model for mini dramas, iQIYI Lite app prioritizes mini dramas with advertising model. Back-end systems largely completed, portfolio expanded to over 10,000 titles, capturing 95% of leading mini drama content providers. User time spent on mini dramas growing.

Membership services

• Q4 membership revenue was RMB 4.1 billion, down annually but rebounded from late Nov due to improved long-form video content and mini dramas for members. Reclassified membership offerings into individual and family categories.

Advertising business

• Revenue in Q4 was RMB 1.4 billion, grew 7% sequentially. Brand ad revenue showed double-digit sequential growth, driven by premium dramas.

Technology and products

• Advanced video business industrialization, intelligent production management system enhanced. Virtual production projects won industry awards. AI used in content creation and project assessment.

Overseas business

• Solid performance in Q4, membership revenue from Hong Kong, UK, Thailand, Australia grew >30% year-over-year. Planning to expand to Middle East, Latin America, and Brazil.

• Aim to boost membership revenue by enhancing quality and share of content, and expand advertising revenue via app inventory growth from mini-drama business.
• For 2025, focus on refining long-form video content production and release timing, and further developing the mini-drama ecosystem for ad monetization.
• Overseas business to pursue rapid revenue growth while maintaining profitability, with plans to enter new markets like Middle East, Latin America, and Brazil.

Forward-looking statements are subject to risks and uncertainties outlined in iQIYI's public filings with the SEC, including those that may cause actual results to differ materially from current expectations.

Q: About 2025 content pipeline and potential blockbusters A: CCO mentioned new season of 'Ride on Theater Drama' testing away launched in Jan, reaching over 10,000 popularity index in 6 days. Focus on improving quality and share of premium top long-form video content, with more dramas planned in suspense, drama, and female-oriented genres Q: Updates on mini drama and 2025 strategy A: CEO discussed mini drama progress, including revamped apps, back-end systems, and over 10,000 titles in portfolio. Next stage focus on introducing leading titles, building original ecosystem, enhancing monetization, and user growth Q: Membership business impact of measures and 2025 strategy A: Membership SVP discussed reclassified membership offerings, crackdown on password sharing, and 2025 plans to enhance premium content programming, build mass-market service, optimize membership products, and strengthen brand perception Q: Overseas business core strategy for 2025 A: Overseas SVP discussed market strategies, aiming for profit and revenue growth in established markets, revenue growth in new markets, and plans to expand to Middle East, Latin America, and Brazil with content tailored to overseas viewers