Chinese video streaming company iQiyi reported a 5% drop in revenue in the second quarter and an 80% drop in net profit.
The company said Thursday that revenue for the April-June period was 7.45 billion yuan ($1.04 billion at current exchange rates), down year-on-year and down 6% from the first quarter.
Net profit was 68.7 million yuan (US$9.6 million), compared with 365 million yuan (US$51.1 million) in the same quarter last year, and 655 million yuan (US$91.7 million) in the first quarter from January to March.
Last year was the first ever for the company to post an annual net profit, a feat it achieved despite declining subscriber numbers (101 million at the end of December 2023) that were more than offset by increased average revenue per user.
Since the beginning of this year, iQiyi has stopped disclosing membership numbers or average revenue per user. The regulatory filing only said that membership service revenue was 4.5 billion yuan ($630 million), down 9% year-on-year “primarily due to fluctuations in the performance of the content catalog.” It was the second consecutive quarter that subscription revenue has contracted.
Ads earned through the platform’s free tiers decreased 2% to RMB 1.5 billion ($210 million), “primarily due to a decline in brand advertising business, which was partially offset by growth in performance-based advertising business.”
“Content distribution revenue was RMB 698 million, up 2% year-on-year. Other revenue was RMB 784 million, up 16% year-on-year, mainly due to increased revenue from talent agency services and third-party collaborations,” the company said.
The filing did not directly address the company’s shrinking subscription business, though it did hint at the effects of competition from other streaming platforms. It also did not shed any light on iQiyi’s attempts to develop an international business outside mainland China.
“We believe that the active competition within the long-form video segment in the second quarter is beneficial to the industry, enhancing its appeal compared to other entertainment formats,” said Gong Yu, founder, director and CEO of iQiyi. “The key to long-term success is to consistently deliver premium content that balances artistic merits and commercial benefits, which we are committed to.”
The company’s Nasdaq-listed ADR shares closed Wednesday near an all-time low, at $3.08 a share. That price gives iQiyi, which is largely owned by tech giant Baidu, a market cap of $1.62 billion.
