Q2 2026 iQIYI Inc Earnings Call Transcript
Key Points
- iQIYI Inc (IQ) maintained the number one market share in long-form drama, film, and children's content categories, and achieved a major breakthrough in short-form dramas, reaching number one market share for the first time in June.
- The company's strategic transformation towards decentralization and AI is yielding measurable results, with a significant increase in creator and content uploads, and AI-driven production reducing costs and timelines by 70-90% for AIGC content.
- Financial performance improved quarter-over-quarter, with total revenues growing sequentially and non-GAAP operating loss narrowing by 80%, approaching breakeven.
- Overseas business sustained rapid growth, with membership revenue up 40% year-over-year, and strong growth in emerging markets like Brazil and Mexico (215% and 150% year-over-year, respectively).
- The company is expanding its content pipeline with a diversified slate of AIGC titles, including the industry's first AIGC internet feature film with a distribution license, and is scaling supply through revenue-sharing models.
- Membership services revenue declined 4% sequentially due to seasonality, indicating potential volatility in subscriber spending.
- Other revenues decreased 19% sequentially, suggesting weakness in non-core revenue streams.
- Content costs increased 2% sequentially, which could pressure margins if not offset by revenue growth.
- The company's non-GAAP operating loss, while narrowed, still indicates ongoing profitability challenges, with a loss of RMB30.3 million in Q2.
- The strategic shift towards decentralization and AI may face execution risks, including the need to balance content quality with cost efficiency, and the potential for increased competition in the AIGC space.
Thank you for standing by, and welcome to the iQIYI second-quarter 2026 earnings conference call. (Operator Instructions)
I would now like to hand the conference over to Ms. Chang Yu, IR Director of the company. Please go ahead.
Thank you, operator. Hello everyone and thank you for joining iQIYIâs second-quarter 2026 earnings conference call. The company's results were released earlier today and are available on the company's Investor Relations website at ir.iqiyi.com.
On the call today are Mr. Yu Gong, our Founder, Director and CEO; Mr. Ying Tian, our CFO; Mr. Xiaohui Wang, our CCO, Chief Content Officer; Mr. Youqiao Duan, Senior Vice President of our Membership Business; Mr. Xianghua Yang, Senior Vice President of International and Online Game Business, and Mr. Gang Wu, Senior Vice President of Brand Advertising Business. Mr. Gong will give a brief overview of the companyâs business operations and highlights, followed by Ying, who will go through the financials. After the prepared remarks,
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