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iQIYI Announces First Quarter 2021 Financial Results

BEIJING, May 18, 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 first quarter ended March 31, 2021.

First Quarter 2021 Highlights

  • Total revenues were RMB8.0 billion (US$1.2 billion[1]), representing a 4% increase from the same period in 2020.
  • Operating loss was RMB1.0 billion (US$154.8 million) and operating loss margin was 13%, compared to operating loss of RMB2.2 billion and operating loss margin of 29% in the same period in 2020.
  • Net loss attributable to iQIYI was RMB1.3 billion (US$193.4 million), compared to net loss attributable to iQIYI of RMB2.9 billion in the same period in 2020. Diluted net loss attributable to iQIYI per ADS was RMB1.61 (US$0.25), compared to diluted net loss attributable to iQIYI per ADS of RMB3.92 in the same period of 2020.
  • The number of total subscribing members was 105.3 million as of March 31, 2021 and 104.3 million excluding individuals with trial memberships.

"We kicked off the year with a solid quarter across the board" commented Dr. Yu Gong, Founder, Director, and Chief Executive Officer of iQIYI. "We had 3.6 million more subscribing members in the first quarter and our membership services revenue grew by 12% quarter-over-quarter, recording the peak level in terms of absolute dollar amount over the past year. The notable growth was largely a result of our strong content launch across various of categories including dramas, variety shows and films during the quarter. Specifically, the drama titled My heroic Husband set up another milestone in terms of both viewership and monetization efficiency, validating our exclusive content strategy. On April 22, we celebrated our 11-year anniversary. We are confident that we will further strengthen our leadership through the know-hows we learned from years of fierce competition. We strongly believe the irreplaceability of long-form video as an entertainment format and we are well prepared for future opportunities and challenges."

"Our total revenue in the first quarter has exceeded our previous guidance, recording healthy growth on both quarter-over-quarter and year-over-year basis." commented Mr. Xiaodong Wang, Chief Financial Officer of iQIYI. "In the first quarter, we delivered multiple well-received content titles. Meanwhile, driven by the improved investment efficiency, our content cost continued to decline on a year-over-year basis for the third consecutive quarter. As always, we are committed to pursuing ROI-driven approach across different aspects of business, including content, technology and marketing and more. This positions us on the right track for the eventual self-sustained status."

Footnotes:

[1] Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.5518 to US$1.00, the exchange rate in effect as of March 31, 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.

First Quarter 2021 Financial Results

Total revenues reached RMB8.0 billion (US$1.2 billion), representing a 4% increase from the same period in 2020.

Membership services revenue was RMB4.3 billion (US$658.1 million), representing a 7% decrease from the same period in 2020. The decrease was primarily due to the decline of our subscribing members from 118.9 million as of March 31, 2020, which was a high base due to the impact of Covid-19, to 105.3 million as of March 31, 2021. Our subscribing members grew 3.6 million quarter-on-quarter due to the strong content launch coupled with the holidays in the first quarter, during which people spent more time viewing content.

Online advertising services revenue was RMB1.9 billion (US$292.5 million), representing a 25% increase from the same period in 2020. The increase was primarily driven by the rebound of both brand-advertising budgets and the number of brand advertisers amid the macroeconomy recovery.

Content distribution revenue was RMB779.1 million (US$118.9 million), representing a 29% increase from the same period in 2020. The increase was primarily driven by more content titles we distributed to other platforms during the quarter.

Other revenues were RMB961.0 million (US$146.7 million), representing a 10% increase from the same period in 2020, primarily due to the growth of certain business lines.

Cost of revenues was RMB7.1 billion (US$1.1 billion), representing a 10% decrease from the same period in 2020. The decrease in cost of revenues was primarily due to less content costs and bandwidth cost during the quarter. Content costs as a component of cost of revenues were RMB5.4 billion (US$829.6 million), representing an 8% decrease from the same period in 2020. The decrease was primarily attributable to decline of licensed content cost.

Selling, general and administrative expenses were RMB1.2 billion (US$183.3 million), representing an 8% decrease from the same period in 2020. This was primarily attribute to less provision for credit losses, which was a result of improved macroeconomic environment versus the same period last year.

Research and development expenses were RMB672.3 million (US$102.6 million), representing a 1% decrease from the same period in 2020.

Operating loss was RMB1.0 billion (US$154.8 million), compared to operating loss of RMB2.2 billion in the same period in 2020. Operating loss margin was 13%, compared to operating loss margin of 29% in the same period in 2020.

Total other expense was RMB222.4 million (US$34.0 million), compared to total other expense of RMB628.5 million during the same period of 2020. The year-over-year variance was mainly due to less foreign exchange loss.

Loss before income taxes was RMB1.2 billion (US$188.7 million), compared to loss before income taxes of RMB2.9 billion in the same period in 2020.

Income tax expense was RMB20.6 million (US$3.1 million), compared to income tax expense of RMB4.8 million in the same period in 2020.

Net loss attributable to iQIYI was RMB1.3 billion (US$193.4 million), compared to net loss attributable to iQIYI of RMB2.9 billion in the same period in 2020. Diluted net loss attributable to iQIYI per ADS was RMB1.61 (US$0.25) for the first quarter of 2021, compared to diluted net loss attributable to iQIYI per ADS of RMB3.92 in the same period of 2020.

As of March 31, 2021, the Company had cash, cash equivalents, restricted cash and short-term investments of RMB13.3 billion (US$2.0 billion).

Financial Guidance

For the second quarter of 2021, iQIYI expects total net revenues to be between RMB7.21 billion (US$1.10 billion) and RMB7.65 billion (US$1.17 billion), representing a 3% decrease to a 3% 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 May 18, 2021, U.S. Eastern Time (7:00 PM on May 18, 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/3375215

It will automatically direct you to the registration page of " iQIYI First 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 "3375215".

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 May 26, 2021.

Dial-in numbers for the replay are as follows:

International Dial-in: +61 2 8199 0299

Passcode: 3375215

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 and e-commerce 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




March 31,


December 31,


March 31,




2020


2020


2021




RMB


RMB


RMB




(Unaudited)


(Unaudited)


(Unaudited)


 Revenues:








Membership services


4,634,347


3,835,201


4,311,804


Online advertising services


1,536,770


1,859,031


1,916,584


Content distribution


602,772


804,335


779,058


Others


875,877


959,613


960,977


 Total revenues


7,649,766


7,458,180


7,968,423










 Operating costs and expenses:








Cost of revenues


(7,902,864)


(6,784,507)


(7,109,394)


Selling, general and administrative


(1,310,603)


(1,317,665)


(1,200,984)


Research and development


(678,135)


(663,381)


(672,256)


 Total operating costs and expenses


(9,891,602)


(8,765,553)


(8,982,634)


 Operating loss


(2,241,836)


(1,307,373)


(1,014,211)










 Other income/(expenses):








Interest income 


56,594


22,409


28,569


Interest expenses


(262,030)


(269,323)


(330,585)


Foreign exchange (loss)/gain, net


(312,422)


28,925


(13,193)


Loss from equity method investments


(96,838)


(40,697)


(3,076)


Others, net


(13,811)


17,651


95,846


 Total other expenses, net


(628,507)


(241,035)


(222,439)










 Loss before income taxes


(2,870,343)


(1,548,408)


(1,236,650)


Income tax (expense)/benefit


(4,841)


16,337


(20,613)










 Net loss


(2,875,184)


(1,532,071)


(1,257,263)


  Less: Net (loss)/income attributable to noncontrolling
interests 


(542)


15,543


9,747


 Net loss attributable to iQIYI, Inc. 


(2,874,642)


(1,547,614)


(1,267,010)


Accretion of redeemable noncontrolling interests


(1,717)


(1,827)


(3,194)


 Net loss attributable to ordinary shareholders


(2,876,359)


(1,549,441)


(1,270,204)










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








 Basic


(0.56)


(0.30)


(0.23)


 Diluted


(0.56)


(0.30)


(0.23)










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








 Basic


(3.92)


(2.10)


(1.61)


 Diluted


(3.92)


(2.10)


(1.61)










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








 Basic


5,137,428,818


5,232,415,954


5,526,721,856


 Diluted


5,137,428,818


5,232,415,954


5,526,721,856




















 

 

iQIYI, INC.

Condensed Consolidated Balance Sheets

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







December 31,


March 31,




2020


2021




RMB


RMB






(Unaudited)


ASSETS






    Current assets:






Cash and cash equivalents


10,915,282


7,352,678


Restricted cash


25,230


42,597


Short-term investments


3,358,174


5,914,741


Accounts receivable, net


3,344,433


3,381,852


Prepayments and other assets


3,515,855


4,251,803


Amounts due from related parties


96,111


172,963


Licensed copyrights, net


1,035,339


1,031,896


    Total current assets


22,290,424


22,148,530








    Non-current assets:






Fixed assets, net


1,393,467


1,360,539


Long-term investments


3,202,828


3,451,349


Deferred tax assets, net


51,347


51,347


Licensed copyrights, net


6,435,055


6,515,859


Intangible assets, net


627,198


607,059


Produced content, net


6,556,084


7,280,667


Prepayments and other assets


2,699,423


2,681,384


Operating lease assets


1,001,857


963,192


Goodwill


3,888,346


3,888,346


Amounts due from related parties


39,400


39,400


    Total non-current assets


25,895,005


26,839,142








Total assets


48,185,429


48,987,672








LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY






Current liabilities:






Accounts and notes payable


7,561,532


7,508,778


Amounts due to related parties


1,778,783


1,897,476


Customer advances and deferred revenue


3,444,917


3,395,569


Convertible senior notes, current portion


4,752,061


4,807,909


Short-term loans


2,965,957


2,201,033


Long-term loans, current portion


909,034


908,414


Operating lease liabilities, current portion


201,307


207,517


Accrued expenses and other liabilities


3,240,987


4,239,695


    Total current liabilities


24,854,578


25,166,391


Non-current liabilities:






Convertible senior notes


11,926,715


12,670,189


Deferred tax liabilities


4,588


2,922


Amounts due to related parties


977,407


946,293


Operating lease liabilities


767,676


709,086


Other non-current liabilities


210,167


199,621


    Total non-current liabilities


13,886,553


14,528,111








Total liabilities


38,741,131


39,694,502








Redeemable noncontrolling interests


108,629


225,743








Shareholders' equity:












Class A ordinary shares


165


171


Class B ordinary shares


183


183


Additional paid-in capital


47,687,483


48,739,428


Accumulated deficit


(40,973,853)


(42,244,057)


Accumulated other comprehensive income


2,542,680


2,501,406


Non-controlling interests


79,011


70,296


Total shareholders' equity


9,335,669


9,067,427








Total liabilities, redeemable noncontrolling interests and shareholders' equity


48,185,429


48,987,672



 

 

iQIYI, INC.

Condensed 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,



2020


2020


2021



RMB


RMB


RMB



(Unaudited)


(Unaudited)


(Unaudited)









Net cash used for operating activities

(604,269)


(1,519,447)


(1,350,028)


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

(1,609,423)


281,471


(2,777,975)


Net cash (used for)/provided by financing activities

(79,473)


8,392,477


610,991


Effect of exchange rate changes on cash, cash equivalents

and restricted cash

64,567


(32,770)


(28,225)


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

(2,228,598)


7,121,731


(3,545,237)









Net cash used for operating activities

(604,269)


(1,519,447)


(1,350,028)


Less: Capital expenditures (2)

(66,824)


(26,523)


(60,550)


Free cash flow

(671,093)


(1,545,970)


(1,410,578)


 

(1) Net cash used for or provided by 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:http://www.prnewswire.com/news-releases/iqiyi-announces-first-quarter-2021-financial-results-301293322.html

SOURCE iQIYI, Inc.

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