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iQIYI Announces Second Quarter 2021 Financial Results

BEIJING, Aug. 12, 2021 /PRNewswire/ -- iQIYI, Inc. (Nasdaq: IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment service in China, today announced its unaudited financial results for the second quarter ended June 30, 2021.

Second Quarter 2021 Highlights

  • Total revenues were RMB7.6 billion (US$1.2 billion1), representing a 3% increase from the same period in 2020.
  • Operating loss was RMB1.1 billion (US$173.7 million) and operating loss margin was 15%, compared to operating loss of RMB1.3 billion and operating loss margin of 17% in the same period in 2020.
  • Net loss attributable to iQIYI was RMB1.4 billion (US$216.4 million), compared to net loss attributable to iQIYI of RMB1.4 billion in the same period in 2020. Diluted net loss attributable to iQIYI per ADS was RMB1.75 (US$0.27), compared to diluted net loss attributable to iQIYI per ADS of RMB1.96 in the same period of 2020.
  • The number of total subscribing members was 106.2 million as of June 30, 2021, or 105.2 million excluding individuals with trial memberships.

"Our second quarter results were largely in line with our expectation," commented Mr. Yu Gong, Founder, Director, and Chief Executive Officer of iQIYI. "Despite the fact that the second quarter is traditionally an off-season, the number of our subscribers grew to 106.2 million, driven by the hit original dramas we launched during the quarter. We continued to lead the market across multiple operating metrics. We also saw encouraging momentum from our iQIYI Lite app targeting lower-tier cities in China and from our overseas expansion. We are still in the early stage of industrialization in video production, and we are continuing to drive industry evolution to achieve long-term growth. Leveraging our deep understanding of users, our highly innovative in-house production teams, as well as our advanced technologies, we believe we are well positioned to address current challenges and capture future market opportunities."

"Our total revenue in the second quarter approached the high end of our guidance," commented Mr. Xiaodong Wang, Chief Financial Officer of iQIYI. "We continue to grow our subscribers and diversify our monetization channels through our premium content and massive user base. Our net loss narrowed for five consecutive quarters on a year-over-year basis as we continue to execute our disciplined investment strategy. Looking ahead, we strive to offer increasingly diversified content portfolio in the second half of the year, which is a key pillar to regain the revenue momentum."

Footnotes:

[1] Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.4566 to US$1.00, the exchange rate in effect as of June 30, 2021 as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. Translations are provided solely for the convenience of the reader.

Second Quarter 2021 Financial Results

Total revenues reached RMB7.6 billion (US$1.2 billion), representing a 3% increase from the same period in 2020.

Membership services revenue was RMB4.0 billion (US$618.4 million), flat compared with the same period in 2020.

Online advertising services revenue was RMB1.8 billion (US$282.7 million), representing a 15% increase from the same period in 2020. The increase was primarily driven by the sustained rebound of brand-advertising budgets amid the macroeconomic recovery in China.

Content distribution revenue was RMB687.9 million (US$106.5 million), representing a 20% decrease from the same period in 2020. The decrease was primarily due to less barter transaction, partially offset by the increase of cash transaction.

Other revenues were RMB1.1 billion (US$170.7 million), representing a 20% increase from the same period in 2020, primarily driven by the strong growth of certain business lines.

Cost of revenues was RMB6.9 billion (US$1.1 billion), flat compared with the same period in 2020. Content costs as a component of cost of revenues were RMB5.1 billion (US$794.8 million), flat compared with the same period in 2020.

Selling, general and administrative expenses were RMB1.2 billion (US$183.5 million), representing a 1% decrease from the same period in 2020.

Research and development expenses were RMB676.5 million (US$104.8 million), representing a 2% increase from the same period in 2020.

Operating loss was RMB1.1 billion (US$173.7 million), compared to operating loss of RMB1.3 billion in the same period in 2020. Operating loss margin was 15%, compared to operating loss margin of 17% in the same period in 2020.

Total other expense was RMB226.4 million (US$35.1 million), compared to total other expense of RMB140.8 million during the same period of 2020. This was mainly due to increased interest expenses related to our financing activities.

Loss before income taxes was RMB1.3 billion (US$208.8 million), compared to loss before income taxes of RMB1.4 billion in the same period in 2020.

Income tax expense was RMB30.4 million (US$4.7 million), compared to income tax expense of RMB15.9 million in the same period in 2020.

Net loss attributable to iQIYI was RMB1.4 billion (US$216.4 million), compared to net loss attributable to iQIYI of RMB1.4 billion in the same period in 2020. Diluted net loss attributable to iQIYI per ADS was RMB1.75 (US$0.27) for the second quarter of 2021, compared to diluted net loss attributable to iQIYI per ADS of RMB1.96 in the same period of 2020.

As of June 30, 2021, the Company had cash, cash equivalents, restricted cash and short-term investments of RMB12.3 billion (US$1.9 billion).

Financial Guidance

For the third quarter of 2021, iQIYI expects total net revenues to be between RMB7.62 billion (US$1.18 billion) and RMB8.05 billion (US$1.25 billion), representing a 6% to 12% increase year over year. This forecast reflects iQIYI's current and preliminary view, which may be subject to change.

Conference Call Information

iQIYI's management will hold an earnings conference call at 7:00 AM on August 12, 2021, U.S. Eastern Time (7:00 PM on August 12, 2021, Beijing Time).

Please register in advance of the conference using the link provided below. Upon registering, you will be provided with participant dial-in numbers, Direct Event passcode and unique registrant ID by email.

Participant Online Registration:  http://apac.directeventreg.com/registration/event/7088859

It will automatically direct you to the registration page of " iQIYI Second Quarter 2021 Earnings Conference Call", where you may fill in your details for RSVP. If it requires you to enter a participant conference ID, please enter "7088859".

In the 10 minutes prior to the call start time, you may use the conference access information (including dial-in number(s), Direct Event passcode and unique registrant ID) provided in the confirmation email that you have received following your pre-registration.

A telephone replay of the call will be available after the conclusion of the conference call through August 19, 2021.

Dial-in numbers for the replay are as follows:

International Dial-in

+61 2 8199 0299

Passcode:

7088859

A live and archived webcast of the conference call will be available at http://ir.iqiyi.com/.

About iQIYI, Inc.

iQIYI, Inc. is an innovative market-leading online entertainment service in China. Its corporate DNA combines creative talent with technology, fostering an environment for continuous innovation and the production of blockbuster content. iQIYI's platform features highly popular original content, as well as a comprehensive library of other professionally-produced content, professional user generated content and user-generated content. The Company distinguishes itself in the online entertainment industry by its leading technology platform powered by advanced AI, big data analytics and other core proprietary technologies. iQIYI attracts a massive user base with tremendous user engagement, and has developed a diversified monetization model including membership services, online advertising services, content distribution, online games, live broadcasting, IP licensing, talent agency, online literature, etc.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements 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, the Financial Guidance and quotations from management in this announcement, as well as iQIYI's 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 shareholders, 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 iQIYI's beliefs and expectations, are forward-looking statements. Forward-looking 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: iQIYI's strategies; iQIYI's future business development, financial condition and results of operations; iQIYI's 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 iQIYI's revenues, costs or expenditures; Chinese governmental policies and regulations relating to the 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 Company's filings with the Securities and Exchange Commission. All information 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 iQIYI's consolidated financial results presented in accordance with GAAP, iQIYI uses free cash flow as non-GAAP financial measure. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

iQIYI believes that the non-GAAP financial measure provides meaningful supplemental information regarding its liquidity by excluding certain items that may not be indicative of its recurring liquidity position, such as operating cash flows adjusted by capital expenditures. The Company believes that both management and investors benefit from referring to the non-GAAP financial measure in assessing its liquidation and when planning and forecasting future periods. The non-GAAP financial measure also facilitates management's internal comparisons to iQIYI's historical liquidity. The Company believes the non-GAAP financial measure is useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using the non-GAAP financial measure is that the non-GAAP measure exclude certain items that have been and will continue to be for the foreseeable future a significant component in the Company's results of operations. The non-GAAP financial measure 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 Company's data.

Free cash flow represents net cash provided by operating activities less capital expenditures.

For more information, please contact:

Investor Relations
iQIYI, Inc.
+ 86 10 8264 6585
ir@qiyi.com

 

 

 

iQIYI, INC.

Condensed Consolidated Statements of Loss

 (In RMB thousands, except for number of shares and per share data) 



Three Months Ended


Six Months Ended


June 30,


March 31,


June 30,


June 30,


June 30,


2020


2021


2021


2020


2021


RMB


RMB


RMB


RMB


RMB


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)

 Revenues:










Membership services

4,045,968


4,311,804


3,992,956


8,680,315


8,304,760

Online advertising services

1,586,083


1,916,584


1,825,333


3,122,853


3,741,917

Content distribution

860,629


779,058


687,891


1,463,401


1,466,949

Others

918,897


960,977


1,102,094


1,794,774


2,063,071

 Total revenues

7,411,577


7,968,423


7,608,274


15,061,343


15,576,697











 Operating costs and expenses:










Cost of revenues

(6,833,586)


(7,109,394)


(6,868,868)


(14,736,450)


(13,978,262)

Selling, general and administrative

(1,195,632)


(1,200,984)


(1,184,736)


(2,506,235)


(2,385,720)

Research and development

(664,045)


(672,256)


(676,481)


(1,342,180)


(1,348,737)

 Total operating costs and expenses

(8,693,263)


(8,982,634)


(8,730,085)


(18,584,865)


(17,712,719)

 Operating loss

(1,281,686)


(1,014,211)


(1,121,811)


(3,523,522)


(2,136,022)











 Other income/(expenses):  










Interest income 

44,425


28,569


29,231


101,019


57,800

Interest expenses

(265,656)


(330,585)


(343,124)


(527,686)


(673,709)

Foreign exchange gain/(loss), net

61,199


(13,193)


35,404


(251,223)


22,211

Loss from equity method investments

(62,205)


(3,076)


(64,230)


(159,043)


(67,306)

Others, net

81,389


95,846


116,280


67,578


212,126

 Total other expense, net

(140,848)


(222,439)


(226,439)


(769,355)


(448,878)











 Loss before income taxes

(1,422,534)


(1,236,650)


(1,348,250)


(4,292,877)


(2,584,900)

Income tax expense

(15,926)


(20,613)


(30,418)


(20,767)


(51,031)











 Net loss

(1,438,460)


(1,257,263)


(1,378,668)


(4,313,644)


(2,635,931)

Less: Net income attributable to
noncontrolling interests 

3,357


9,747


18,559


2,815


28,306

 Net loss attributable to iQIYI, Inc. 

(1,441,817)


(1,267,010)


(1,397,227)


(4,316,459)


(2,664,237)

Accretion of redeemable noncontrolling
interests

(1,747)


(3,194)


(4,343)


(3,464)


(7,537)

 Net loss attributable to ordinary
shareholders

(1,443,564)


(1,270,204)


(1,401,570)


(4,319,923)


(2,671,774)











 Net loss per share for Class A and Class
B ordinary shares:










 Basic

(0.28)


(0.23)


(0.25)


(0.84)


(0.48)

 Diluted

(0.28)


(0.23)


(0.25)


(0.84)


(0.48)











 Net loss per ADS (1 ADS equals 7 Class A
ordinary shares):










 Basic

(1.96)


(1.61)


(1.75)


(5.88)


(3.36)

 Diluted

(1.96)


(1.61)


(1.75)


(5.88)


(3.36)











Weighted average number of Class A and
Class B ordinary shares used in net loss
per share computation:










Basic

5,151,499,718


5,526,721,856


5,569,531,698


5,144,464,250


5,548,245,034

Diluted

5,151,499,718


5,526,721,856


5,569,531,698


5,144,464,250


5,548,245,034

 


 

 

iQIYI, INC.

Condensed Consolidated Balance Sheets

(In RMB thousands, except for number of shares and per share data)






December 31,


June 30,




2020


2021




RMB


RMB






(Unaudited)


ASSETS






    Current assets:






Cash and cash equivalents


10,915,282


6,684,907


Restricted cash


25,230


51,174


Short-term investments


3,358,174


5,526,397


Accounts receivable, net


3,344,433


3,144,074


Prepayments and other assets


3,515,855


4,049,567


Amounts due from related parties


96,111


190,183


Licensed copyrights, net


1,035,339


890,326


    Total current assets


22,290,424


20,536,628








    Non-current assets:






Fixed assets, net


1,393,467


1,353,765


Long-term investments


3,202,828


3,422,487


Deferred tax assets, net


51,347


80,368


Licensed copyrights, net


6,435,055


6,714,313


Intangible assets, net


627,198


594,900


Produced content, net


6,556,084


8,675,781


Prepayments and other assets


2,699,423


2,518,445


Operating lease assets


1,001,857


1,049,711


Goodwill


3,888,346


3,888,346


Amounts due from related parties


39,400


81,400


    Total non-current assets


25,895,005


28,379,516








Total assets


48,185,429


48,916,144








LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS'
EQUITY






Current liabilities:






Accounts and notes payable


7,561,532


8,227,836


Amounts due to related parties


1,778,783


2,308,768


Customer advances and deferred revenue


3,444,917


3,248,965


Convertible senior notes, current portion


4,752,061


4,777,143


Short-term loans


2,965,957


3,008,224


Long-term loans, current portion


909,034


915,501


Operating lease liabilities, current portion


201,307


209,015


Accrued expenses and other liabilities


3,240,987


3,531,999


    Total current liabilities


24,854,578


26,227,451


Non-current liabilities:






Convertible senior notes


11,926,715


12,591,930


Deferred tax liabilities


4,588


12,531


Amounts due to related parties


977,407


852,788


Operating lease liabilities


767,676


700,555


Other non-current liabilities


210,167


196,525


    Total non-current liabilities


13,886,553


14,354,329








Total liabilities


38,741,131


40,581,780








Redeemable noncontrolling interests


108,629


230,086








Shareholders' equity:












Class A ordinary shares


165


172


Class B ordinary shares


183


183


Additional paid-in capital


47,687,483


49,077,376


Accumulated deficit


(40,973,853)


(43,645,627)


Accumulated other comprehensive income


2,542,680


2,590,176


Non-controlling interests


79,011


81,998


Total shareholders' equity


9,335,669


8,104,278








Total liabilities, redeemable noncontrolling interests and shareholders' equity


48,185,429


48,916,144



 

 

 

iQIYI, INC.

Condensed Consolidated Statements of Cash Flows 

 (In RMB thousands, except for number of shares and per share data) 





Three Months Ended



June 30,


March 31,


June 30,



2020


2021


2021



RMB


RMB


RMB



(Unaudited)


(Unaudited)


(Unaudited)









Net cash used for operating activities

(1,358,278)


(1,350,028)


(1,425,910)


Net cash provided by/(used for) investing activities (1)

1,144,401


(2,777,975)


58,140


Net cash provided by financing activities

822,793


610,991


801,074


Effect of exchange rate changes on cash, cash equivalents
and restricted cash

(10,016)


(28,225)


(92,498)


Net increase/(decrease) in cash, cash equivalents and
restricted cash

598,900


(3,545,237)


(659,194)









Net cash used for operating activities

(1,358,278)


(1,350,028)


(1,425,910)


Less: Capital expenditures (2)

(57,465)


(60,550)


(60,728)


Free cash flow

(1,415,743)


(1,410,578)


(1,486,638)




(1)     Net cash provided by or used for investing activities primarily consists of net cash flows from investing in debt
securities, purchase of long-term investments and capital expenditures.


(2)     Capital expenditures are incurred primarily in connection with leasehold improvements, computers and servers.


 

Cision View original content:https://www.prnewswire.com/news-releases/iqiyi-announces-second-quarter-2021-financial-results-301354203.html

SOURCE iQIYI, Inc.

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