1、 iQIYI Announces First Quarter 2024 Financial Results BEIJING,CHINA,May 16,2024 iQIYI,Inc.(Nasdaq:IQ)(iQIYI or the Company),a leading provider of online entertainment video services in China,today announced its unaudited financial results for the first quarter ended March 31,2024.First Quarter 2024

2、Highlights Total revenues were RMB7.9 billion(US$1.1 billion1),decreasing 5%year over year.Operating income was RMB944.8 million(US$130.8 million)and operating income margin was 12%,compared to operating income of RMB858.6 million and operating income margin of 10%in the same period in 2023.Non-GAAP

3、 operating income2 was RMB1.1 billion(US$150.4 million)and non-GAAP operating income margin was 14%,compared to non-GAAP operating income of RMB1.0 billion and non-GAAP operating income margin of 12%in the same period in 2023.Net income attributable to iQIYI was RMB655.3 million(US$90.8 million),com

4、pared to net income attributable to iQIYI of RMB618.1 million in the same period in 2023.Non-GAAP net income attributable to iQIYI2 was RMB844.3 million(US$116.9 million),compared to non-GAAP net income attributable to iQIYI of RMB939.5 million in the same period in 2023.“Our operating profits and c

5、orresponding margins reached historical highs,thanks to our quality execution and increased operating efficiency,”commented Mr.Yu Gong,Founder,Director,and Chief Executive Officer of iQIYI.“The initial integration of generative AI into our operations is already yielding promising results.We are eage

6、r to harness the power of this innovative technology to improve our capacity for delivering top-tier content and to expand our growth possibilities.”“We have been generating positive operating cash flow for eight consecutive quarters,and our balance sheet continued to improve,”commented Mr.Jun Wang,

7、Chief Financial Officer of iQIYI.“This makes our business more defensible and offers us more tools to improve shareholder value over time.”First Quarter 2024 Financial Highlights Three Months Ended(Amounts in thousands of Renminbi(“RMB”),except for per ADS data,unaudited)March 31,December 31,March 3

8、1,2023 2023 2024 RMB RMB RMB Total revenues 8,348,807 7,706,468 7,927,355 Operating income 858,631 773,709 944,753 Operating income(non-GAAP)1,034,296 927,818 1,085,762 Net income attributable to iQIYI,Inc.618,109 466,233 655,317 Net income attributable to iQIYI,Inc.(non-GAAP)939,533 682,026 844,325

9、 Diluted net income per ADS 0.64 0.48 0.68 Diluted net income per ADS(non-GAAP)2 0.97 0.70 0.87 Footnotes:1 Unless otherwise noted,RMB to USD was converted at an exchange rate of RMB7.2203 as of March 29,2024,as set forth in the H.10 statistical release of the Board of Governors of the Federal Reser

10、ve System.Translations are provided solely for the convenience of the reader.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).First Quarter 2024 Financial Resul

11、ts Total revenues reached RMB7.9 billion(US$1.1 billion),decreasing 5%year over year.Membership services revenue was RMB4.8 billion(US$664.6 million),decreasing 13%year over year.The decrease was primarily due to the high base effect in the same period last year.Online advertising services revenue w

12、as RMB1.5 billion(US$205.3 million),increasing 6%year over year.The increase was primarily driven by the growth of performance-based advertising business.Content distribution revenue was RMB928.0 million(US$128.5 million),increasing 27%year over year,primarily driven by the distribution of several m

13、ajor titles.Other revenues were RMB718.4 million(US$99.5 million),increasing 8%year over year,primarily driven by the increase of revenue derived from third-party cooperation.Cost of revenues was RMB5.6 billion(US$779.9 million),decreasing 5%year over year.Content costs as a component of cost of rev

14、enues were RMB4.0 billion(US$553.5 million),decreasing 5%year over year.The decrease in content cost was driven by our improvement in content strategy and operating efficiency.Selling,general and administrative expenses were RMB922.0 million(US$127.7 million),decreasing 17%year over year.The decreas

15、e was primarily due to disciplined marketing spending and reversal of allowance for credit losses.Research and development expenses were RMB429.3 million(US$59.5 million),flat year over year.Operating income was RMB944.8 million(US$130.8 million),increasing 10%year over year.Operating income margin

16、was 12%,compared to operating income margin of 10%in the same period in 2023.Non-GAAP operating income was RMB1.1 billion(US$150.4 million),increasing 5%year over year.Non-GAAP operating income margin was 14%,compared to non-GAAP operating income margin of 12%in the same period in 2023.Total other e

17、xpense was RMB261.3 million(US$36.2 million),increasing 25%year over year,primarily due to loss from foreign exchange,less interest income and non-operating income related to the repurchase of convertible senior notes,partially offset by less loss pick-up from equity method investments.Income before

18、 income taxes was RMB683.5 million(US$94.7 million),compared to income before income taxes of RMB650.4 million in the same period in 2023.Income tax expense was RMB17.6 million(US$2.4 million),compared to income tax expense of RMB24.6 million in the same period in 2023.Net income attributable to iQI

19、YI was RMB655.3 million(US$90.8 million),increasing 6%year over year.Diluted net income attributable to iQIYI per ADS was RMB0.68(US$0.09)for the first quarter of 2024,compared to diluted net income attributable to iQIYI per ADS of RMB0.64 in the same period of 2023.Non-GAAP net income attributable

20、to iQIYI was RMB844.3 million(US$116.9 million),decreasing 10%year over year.Non-GAAP diluted net income attributable to iQIYI per ADS was RMB0.87(US$0.12),compared to non-GAAP diluted net income attributable to iQIYI per ADS of RMB0.97 in the same period of 2023.Operating cash flow was RMB937.8 mil

21、lion(US$129.9 million),compared to operating cash flow of RMB1.0 billion in the same period of 2023.Free cash flow was RMB915.3 million(US$126.8 million),compared to free cash flow of RMB1.0 billion in the same period of 2023.As of March 31,2024,the Company had cash,cash equivalents,short-term inves

22、tments and long-term restricted cash included in prepayments and other assets of RMB7.3 billion(US$1.0 billion).Conference Call Information iQIYIs management will hold an earnings conference call at 7:00 AM on May 16,2024,U.S.Eastern Time(7:00 PM on May 16,2024,Beijing Time).Please register in advan

23、ce of the conference using the link provided below.Upon registering,you will be provided with participant dial-in numbers,passcode and unique access PIN by a calendar invite.Participant Online Registration:https:/s1.c- It will automatically direct you to the registration page of iQIYI First Quarter

24、2024 Earnings Conference Call,where you may fill in your details for RSVP.In the 10 minutes prior to the call start time,you may use the conference access information(including dial-in number(s),passcode and unique access PIN)provided in the calendar invite that you have received following your pre-

25、registration.A telephone replay of the call will be available after the conclusion of the conference call through May 23,2024.Dial-in numbers for the replay are as follows:International Dial-in +1 855 883 1031 Passcode:10038227 A live and archived webcast of the conference call will be available at

26、http:/ iQIYI,Inc.iQIYI,Inc.is a leading provider of online entertainment video services in China.It combines creative talent with technology to foster an environment for continuous innovation and the production of blockbuster content.It produces,aggregates and distributes a wide variety of professio

27、nally produced content,as well as a broad spectrum of other video content in a variety of formats.iQIYI distinguishes itself in the online entertainment industry by its leading technology platform powered by advanced AI,big data analytics and other core proprietary technologies.Over time,iQIYI has b

28、uilt a massive user base and developed a diversified monetization model including membership services,online advertising services,content distribution,online games,IP licensing,talent agency,online literature,etc.Safe Harbor Statement This announcement contains forward-looking statements.These state

29、ments 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,t

30、he quotations from management in this announcement,as well as iQIYIs 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 shareho

31、lders,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 iQIYIs beliefs and expectations,are forward-looking statements.Forward-lookin

32、g 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:iQIYIs strategies;iQIYIs future business development,financial condition and resu

33、lts of operations;iQIYIs 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 iQIYIs revenues,costs or expenditures;Chinese governmental policies and regulations relating to t

34、he 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 Companys filings with the Securities and Exchange Commission.All inform

35、ation 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.Non-GAAP Financial Measures To supplement iQIYIs consolidated financial results presented in accordance w

36、ith GAAP,iQIYI uses the following non-GAAP financial measures:non-GAAP operating income,non-GAAP operating income margin,non-GAAP net income attributable to iQIYI,non-GAAP diluted net income attributable to iQIYI per ADS and free cash flow.The presentation of the non-GAAP financial measure is not in

37、tended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.iQIYI believes that these non-GAAP financial measures provide meaningful supplemental information regarding its operating performance by excluding certain items that m

38、ay not be indicative of its business operating results,such as operating performance excluding non-cash charges or non-operating in nature.The Company believes that both management and investors benefit from referring to the non-GAAP financial measures in assessing its performance and when planning

39、and forecasting future periods.These non-GAAP financial measures also facilitate managements internal comparisons to iQIYIs historical operating performance.The Company believes the non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental

40、information used by management in its financial and operational decision making.A limitation of using these non-GAAP financial measures is that the non-GAAP measures exclude certain items that have been and will continue to be for the foreseeable future a significant component in the Companys result

41、s of operations.These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies.Other companies may calculate similarly titled measures differently,limiting their usefulness as comparative measures to the Companys data.Non-GAAP operati

42、ng income represents operating income excluding share-based compensation expenses,amortization of intangible assets resulting from business combinations.Non-GAAP net income attributable to iQIYI,Inc.represents net income attributable to iQIYI,Inc.excluding share-based compensation expenses,amortizat

43、ion of intangible assets resulting from business combinations,disposal gain or loss,impairment of long-term investments,fair value change of long-term investments,adjusted for related income tax effects.iQIYIs share of equity method investments for these non-GAAP reconciling items,primarily amortiza

44、tion and impairment of intangible assets not on the investees books,accretion of their redeemable non-controlling interests,and the gain or loss associated with the issuance of shares by the investees at a price higher or lower than the carrying value per share,adjusted for related income tax effect

45、s,are also excluded.Non-GAAP diluted net income per ADS represents diluted net income per ADS calculated by dividing non-GAAP net income attributable to iQIYI,Inc,by the weighted average number of ordinary shares expressed in ADS.Free cash flow represents net cash provided by operating activities le

46、ss capital expenditures.For more information,please contact:Investor Relations iQIYI,I 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 31,2023 2023 2024 RMB RMB RMB (Unaudited)(Unaudi

47、ted)(Unaudited)Revenues:Membership services 5,547,305 4,808,727 4,798,861 Online advertising services 1,403,752 1,650,513 1,482,052 Content distribution 731,907 506,059 928,009 Others 665,843 741,169 718,433 Total revenues 8,348,807 7,706,468 7,927,355 Operating costs and expenses:Cost of revenues (

48、5,956,003)(5,533,082)(5,631,239)Selling,general and administrative (1,105,855)(947,806)(922,035)Research and development (428,318)(451,871)(429,328)Total operating costs and expenses (7,490,176)(6,932,759)(6,982,602)Operating income 858,631 773,709 944,753 Other income/(expense):Interest income 104,

49、986 55,098 58,740 Interest expenses (285,964)(284,301)(282,135)Foreign exchange gain/(loss),net 36,982 10,660 (31,551)(Loss)/gain from equity method investments (85,109)(1,284)13,514 Others,net 20,862 (39,972)(19,859)Total other expense,net (208,243)(259,799)(261,291)Income before income taxes 650,3

50、88 513,910 683,462 Income tax expense (24,632)(38,473)(17,633)Net income 625,756 475,437 665,829 Less:Net income attributable to noncontrolling interests 7,647 9,204 10,512 Net income attributable to iQIYI,Inc.618,109 466,233 655,317 Net income attributable to ordinary shareholders 618,109 466,233 6

51、55,317 Net income per share for Class A and Class B ordinary shares:Basic 0.09 0.07 0.10 Diluted 0.09 0.07 0.10 Net income per ADS(1 ADS equals 7 Class A ordinary shares):Basic 0.66 0.49 0.68 Diluted 0.64 0.48 0.68 Weighted average number of Class A and Class B ordinary shares used in net income per

52、 share computation:Basic 6,569,658,687 6,713,897,712 6,717,652,924 Diluted 6,754,965,091 6,834,735,594 6,788,073,126 iQIYI,INC.Condensed Consolidated Balance Sheets (In RMB thousands,except for number of shares and per share data)December 31,March 31,2023 2024 RMB RMB (Unaudited)ASSETS Current asset

53、s:Cash and cash equivalents 4,434,525 5,045,322 Restricted cash 6,120 -Short-term investments 941,738 985,970 Accounts receivable,net 2,169,042 2,727,305 Prepayments and other assets 2,794,259 2,602,327 Amounts due from related parties 1,707,024 1,716,816 Licensed copyrights,net 582,521 724,610 Tota

54、l current assets 12,635,229 13,802,350 Non-current assets:Fixed assets,net 863,813 845,380 Long-term investments 2,260,785 2,217,918 Licensed copyrights,net 6,966,508 6,920,485 Intangible assets,net 309,534 333,395 Produced content,net 13,376,985 13,613,389 Prepayments and other assets 3,518,210 3,8

55、45,572 Operating lease assets 683,897 661,171 Goodwill 3,820,823 3,820,823 Amounts due from related parties 158,590 239,328 Total non-current assets 31,959,145 32,497,461 Total assets 44,594,374 46,299,811 LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities:Accounts and notes payable 5,671,074 5

56、,897,266 Amounts due to related parties 2,953,658 2,839,277 Customer advances and deferred revenue 4,373,208 4,650,902 Convertible senior notes,current portion 2,802,442 2,854,578 Short-term loans 3,571,637 3,520,199 Long-term loans,current portion 2,000 23,000 Operating lease liabilities,current po

57、rtion 100,883 97,214 Accrued expenses and other liabilities 2,866,632 3,111,662 Total current liabilities 22,341,534 22,994,098 Non-current liabilities:Long-term loans 97,990 326,830 Convertible senior notes 8,143,994 8,357,217 Deferred tax liabilities 824 560 Amounts due to related parties 80,566 7

58、5,569 Operating lease liabilities 523,747 499,599 Other non-current liabilities 1,220,804 1,276,089 Total non-current liabilities 10,067,925 10,535,864 Total liabilities 32,409,459 33,529,962 Shareholders equity:Class A ordinary shares 237 237 Class B ordinary shares 193 193 Additional paid-in capit

59、al 54,971,469 55,122,923 Accumulated deficit (44,573,428)(43,918,111)Accumulated other comprehensive income 1,688,047 1,508,392 Non-controlling interests 98,397 56,215 Total shareholders equity 12,184,915 12,769,849 Total liabilities and shareholders equity 44,594,374 46,299,811 iQIYI,INC.Condensed

60、Consolidated Statements of Cash Flows (In RMB thousands,except for number of shares and per share data)Three Months Ended March 31,December 31,March 31,2023 2023 2024 RMB RMB RMB (Unaudited)(Unaudited)(Unaudited)Net cash provided by operating activities 1,001,765 633,586 937,773 Net cash provided by

61、/(used for)investing activities(1,2)166,845 (1,430,634)(222,755)Net cash(used for)/provided by financing activities(3,356,630)(22,484)261,136 Effect of exchange rate changes on cash,cash equivalents and restricted cash(8,862)(31,445)14,606 Net(decrease)/increase in cash,cash equivalents and restrict

62、ed cash(2,196,882)(850,977)990,760 Cash,cash equivalents and restricted cash at the beginning of the period 7,861,556 6,131,585 5,280,608 Cash,cash equivalents and restricted cash at the end of the period 5,664,674 5,280,608 6,271,368 Reconciliation of cash and cash equivalents and restricted cash:C

63、ash and cash equivalents 4,529,267 4,434,525 5,045,322 Restricted cash 6,120 6,120 -Long-term restricted cash 1,129,287 839,963 1,226,046 Total cash and cash equivalents and restricted cash shown in the statements of cash flows 5,664,674 5,280,608 6,271,368 Net cash provided by operating activities

64、1,001,765 633,586 937,773 Less:Capital expenditures(2)(241)(19,231)(22,429)Free cash flow 1,001,524 614,355 915,344 (1)Net cash provided by or used for investing activities primarily consists of net cash flows from loans provided to related party,investing in debt securities,purchase of long-term in

65、vestments and capital expenditures.(2)Capital expenditures are incurred primarily in connection with construction in process,computers and servers.iQIYI,INC.Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures(Amounts in thousands of Renminbi(“RMB”),except for per A

66、DS information,unaudited)Three Months Ended March 31,December 31,March 31,2023 2023 2024 RMB RMB RMB Operating income 858,631 773,709 944,753 Add:Share-based compensation expenses 169,046 152,576 139,476 Add:Amortization of intangible assets(1)6,619 1,533 1,533 Operating income(non-GAAP)1,034,296 92

67、7,818 1,085,762 Net income attributable to iQIYI,Inc.618,109 466,233 655,317 Add:Share-based compensation expenses 169,046 152,576 139,476 Add:Amortization of intangible assets(1)6,619 1,533 1,533 Add:Impairment of long-term investments 118,984 62,231 70,745 Add:Fair value loss/(gain)of long-term in

68、vestments 9,445 (323)(22,482)Add:Reconciling items on equity method investments(2)18,351 -Add:Tax effects on non-GAAP adjustments(3)(1,021)(224)(264)Net income attributable to iQIYI,Inc.(non-GAAP)939,533 682,026 844,325 Diluted net income per ADS 0.64 0.48 0.68 Add:Non-GAAP adjustments to earnings p

69、er ADS 0.33 0.22 0.19 Diluted net income per ADS(non-GAAP)0.97 0.70 0.87 (1)This represents amortization of intangible assets resulting from business combinations.(2)This represents iQIYIs share of equity method investments for other non-GAAP reconciling items,primarily amortization and impairment o

70、f intangible assets not on the investees books,accretion of their redeemable noncontrolling interests,and the gain or loss associated with the issuance of shares by the investees at a price higher or lower than the carrying value per share.(3)This represents tax impact of all relevant non-GAAP adjustments.