On August 22, iQiyi released its unaudited results announcement for the second quarter ended June 30, 2023.。According to the financial report data, the company's total revenue during the reporting period reached 7.8 billion yuan (RMB, the same below), up 17% year-on-year;.$65.2 billion, compared to a net loss of 2.14 billion yuan; member service revenue reached 4.9 billion yuan, up 15% year-on-year; average daily subscription membership reached 1.1.1 billion, up 13% from 98.3 million in the same period last year, but slightly lower than the 1 in the first quarter of this year..2.9 billion。

iQiyi is continuing on the path of high-quality growth

From the data point of view alone, this report card can be described as more satisfactory: total revenue and member services revenue during the reporting period recorded double-digit growth;。

Regarding the financial report, Gong Yu, founder and CEO of iQiyi, said, "We have consistently implemented the original content strategy, and high-quality content has helped iQiyi achieve its best performance in the second quarter in history, with solid performance in key indicators such as total revenue, profit, free cash flow and average daily subscription membership.。He also revealed to investors through the earnings report: "We are actively exploring transformative technologies such as AIGC to prepare for future business growth."。"

Wang Jun, chief financial officer of iQiyi, said: "In the second quarter, iQiyi's total revenue increased by 17% year-on-year, while GAAP (U.S. General Accounting Standards) and Non-GAAP operating profit increased by 385% and 129% year-on-year, respectively.。In addition, operating cash flow was 8.$8.6 billion, positive for five consecutive quarters;.7.2 billion yuan, positive for four consecutive quarters。Total interest-bearing debt fell sharply month-on-month.。"

Wang Jun summed up this quarter's earnings report in one sentence: "iQiyi is continuing to move forward on the path of high-quality growth.。"

2023Q2: Average daily total subscription membership 1.11.2 billion member service revenue reached 4.9 billion yuan

In terms of revenue, in the second quarter of 2023, iQiyi's total revenue reached 7.8 billion yuan, up 17% year-on-year.。Specifically, member services revenue was $4.9 billion, up 15% year-on-year, mainly due to an increase in the number of subscribed members and continued refined operations, which improved liquidity.。Average monthly single-member revenue (ARM) for the second quarter was 14.82 yuan, compared with the same period last year 14.53 yuan, up 2% from the previous quarter 14.35 yuan Growth Exceeds 3%。At the same time, the membership structure was further optimized, and the number and share of annual card members increased significantly compared to the same period last year.。

In terms of online advertising services, second-quarter revenue was 1.5 billion yuan, up 25% year-on-year, mainly due to strong growth in performance advertising, followed by the performance contribution of brand advertising;.5.3 billion yuan; other revenue, motivated by third-party cooperation, the business segment revenue also recorded an increase, up 16% year-on-year to 8..07 billion yuan。

In terms of costs, iQiyi's second-quarter revenue costs were $5.8 billion, up 10% year-on-year.。As an important part of revenue costs, content cost expenditure of 4.1 billion yuan, up 7% year-on-year, mainly due to the number of original dramas and variety shows launched in the quarter increased year-on-year.。

According to Yunhe data, as of the second quarter of 2023, iQi art drama market share has led the industry for six consecutive quarters。According to media statistics, in this quarter, a total of 30 episodes of iQiyi were released to CCTV and all levels of satellite TV, opening up the coverage of the original ecology, so that its multi-dimensional spread to more user circles.。Among them, iQiyi continued to consolidate the brand awareness of "continue to create diversified high-quality explosive models," and launched a number of popular works such as "Changfeng Ferry," "Dust for 13 Years" and "Yunxiang Biography" in this quarter, winning word of mouth while indirectly feeding revenue and profits.。For example, among the above-mentioned works, only the drama "Long Wind Crossing" has attracted more than 40 brand advertisers, which is the best performance drama of this year's investment promotion.。

In terms of variety, iQiyi also continued to make efforts in the second quarter, launching "Moe Detective 3," "China Rap Peak Showdown 2023," "Hahaha Hahaha 3" and "Farming Bar" and other explosive variety shows, doubling the market share of its solo variety shows from the previous quarter.。Among the many variety shows, the most eye-catching is "China Rap Peak Showdown 2023," which has not only become the most popular variety show in the iQiyi station up to 2023, but its cultural influence has expanded to other fields such as music festivals, artist brokerage and derivatives.。The variety's songs hit the shelves in Tencent Music and NetEase Cloud Music this season, setting a new high in this IP music copyright revenue。

In addition, with the increase in marketing expenses, iQiyi cost side of the "quarter sales and management expenses" also increased by 22% year-on-year, reaching 9.7.9 billion yuan。

In terms of profit, iQiyi's operating profit for the quarter was 6.1 billion yuan, operating profit margin of 8%。non-GAAP, operating profit 7.$8.6 billion, operating margin of 10%。

iQiyi: AIGC has been gradually applied to content production

In a conference call after the earnings report, Duan Youqiao, senior vice president of iQiyi and president of the new technology consumer business group, said that iQiyi's annual card size and annual card percentage have been continuously increasing year-on-year, and will continue to guide users to make long-term subscriptions to increase the percentage of long-term card users, while at the same time through the membership points system to benefit long-term subscribers and improve membership retention rates.。

In the face of the current fierce competition in the summer, iQiyi chief content officer Wang Xiaohui said, the summer industry in the supply of high-quality content is sufficient, whether it is online drama or offline movies, the industry is competing for user attention;。IQI will continue to adhere to the boutique strategy, diversification strategy, in the premise of ensuring the quality of the project, do a good job of start-up and production planning, to ensure the long-term sustainable supply of diversified boutique content.。

In response to the recovery of the offline entertainment industry, Wang Xiaohui also said, "On the one hand, iQiyi is still more focused on its own strengths, focusing on the production and operation of online content; on the other hand, the recovery of offline cinema movies will help the supply of movies as a second window to resume growth.。"

In the financial report, Gong Yu, founder and CEO of iQiyi, has revealed that the use of generative artificial intelligence technology (AIGC) to improve the efficiency of content production and promotion in the long video industry is becoming a key exploration direction for iQiyi.。In the conference call, Gong Yu reiterated this view, saying that he is actively exploring transformative technologies such as AIGC for future business growth, and will also pay close attention to suitable opportunities to rationally and reasonably increase investment in innovative businesses to prepare for the construction of the company's next growth curve.。

The binding of iQiyi and artificial intelligence is not new。In March of this year, Gong Yu publicly stated to the media that artificial intelligence will have a huge impact on the content-led industry, hinting that it will explore the linkage between the film and television production industry and artificial intelligence technology.。iQiyi is making rapid progress, and at the end of July, the company announced that it will fully access Baidu Wenxin's big model and use its powerful AI capabilities to make personalized recommendations to users to provide users with content that is more in line with their interests and needs.。

Specifically, iQiyi will use Baidu Wenxin Yiyan's deep learning algorithm to analyze users' viewing history, search history and other information, so as to recommend relevant video content for users.。In addition, users can also put forward specific requirements to Baidu Wenxin through natural language, such as "recommend me the best science fiction movie," so as to obtain accurate recommendations that meet the needs.。

According to iQiyi, at present, AIGC and other innovative technologies have been gradually applied in iQiyi content production, market publicity, playback interaction and other scenes, and initial results, improve the efficiency of content production and operation.。For example, the use of large models to extract core information from scripts can assist in pre-project script evaluation for more accurate budget planning and resource management;。