iQIYI Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Total Revenues:: RMB 6.3 billion, up 1% sequentially.

Membership Services Revenue:: RMB 4.0 billion, down 4% sequentially due to seasonality.

Online Advertising Revenue:: RMB 1.2 billion, flat sequentially.

Content Distribution Revenue:: RMB 681.5 million, up 9% sequentially.

Operating Expenses:: Total operating expenses decreased by 6% to RMB 1.1 billion, reflecting disciplined marketing spending.

Non-GAAP Operating Loss:: Narrowed to RMB 30.3 million from RMB 148.6 million in Q1, approaching breakeven.

Cash Flow:: Net cash provided by operating activities increased to RMB 339.6 million from RMB 186.4 million in Q1.

Cash Position:: RMB 4.1 billion in cash, cash equivalents, and short-term investments.

2Strategic Updates and Business Highlights

Content Leadership:: iQIYI maintained the #1 market share in long-form drama, film, and children's content, and achieved #1 in short-form dramas for the first time.

Decentralization and AI Strategy:: The company is transitioning to a decentralized creator-centric model and heavily investing in AI to enhance content production efficiency and reduce costs.

Creator Ecosystem Growth:: The iQIYI Creator Center has seen a significant increase in creators and content uploads, with daily uploads rising by 30% to 500%.

AI-Generated Content (AIGC):: Launched 16 AI-generated short-form dramas and the first AIGC Internet feature film, "Mystic Tale Chitan," marking a shift to large-scale production.

International Growth:: Membership revenues from overseas markets grew 40% year-over-year, with significant growth in Brazil (215%) and Mexico (150%).

3Forward Guidance and Outlook

iQIYI plans to expand its content slate with more long-form and short-form dramas, including a diversified lineup of female-oriented titles and AIGC projects.

The company expects the benefits of its AI and decentralization strategies to start materializing in terms of improved profitability and cash flow in the upcoming quarters.

4Bad News, Challenges, or Points of Concern

Membership Revenue Decline:: The sequential decline in membership revenue due to seasonality raises concerns about subscriber retention and growth strategies.

Operational Risks:: The transition to a decentralized model and heavy reliance on AI may present operational challenges and risks in maintaining content quality and user engagement.

Competitive Pressures:: The evolving landscape of the video industry, particularly with AI advancements, poses risks from competitors who may adopt similar strategies.

5Notable Q&A Insights

Future Business Model:: Management emphasized the importance of AI and decentralization in shaping iQIYI’s future, aiming to enhance content quality and production efficiency.

AIGC Strategy:: The company is prioritizing AIGC in micro-dramas and animations, while maintaining a focus on high-quality long-form content.

Core Competitiveness:: iQIYI's competitive edge lies in its comprehensive capabilities from content creation to monetization, supported by a robust creator ecosystem.

International Market Strategy:: The company plans to replicate successful operational strategies from mature markets like Thailand to new markets, focusing on tailored content and partnerships. This summary encapsulates the key points from iQIYI's Q2 2026 earnings call, highlighting both the positive developments and challenges faced by the company.