iQIYI (IQ) 12 Aug 212021 Q2 Earnings call transcript

Good day and thank you for standing by. Welcome to iQIYI Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I will now like to hand the conference over to Ms. Capital Safe iQIYI harbor of opening read Head and remarks statement. Liu, Market to of the Fan Please go ahead.

Officer. Chief of Mr. CTO, Company's highlights Wang today Thank mid-term Q goal and Founder, you Company's Technology call XXXX our business The today, Wenfeng, Quarter And Wang joining guidance. will Investor Liu Wenfeng CEO. Chief iQIYI was in the their and our Operator, Xiaodong and give A and and ir.iQIYI.com session. Mr. Content Yu and CFO. thank who After Mr. Officer. our and earnings you Relations website are conference will Xiaodong on on we're Gong prepared go joined Mr. is a Mr. Director, available financials Xiaohui the through and for followed CCO, at Second readout Xiaohui operations the the the Yu released the call. by our Xiaodong brief the overview Company's remarks, Gong,

Before the please under provisions forward-looking harbor contain the Litigation Safe discussion statements of the we today note Private Act of made Securities Reform XXXX. proceed, U.S. will that

are turn except and filings actual to ahead. expectations. cause our with in now materially the risks over Gong required call under that as update may statements, law. SEC. results obligation are applicable that, forward-looking current uncertainties subject Potential any please to SEC will the undertakes to from any statements With our I to go include and outlined those Mr. to differ risks and uncertainties limited Forward-looking not public

Hello, everyone.

X-year with total favorable momentum end maintained the revenue of quarter, quarter, high second first the we For approaching the guidance. our from

to year-over-year cost X on a our expense for consecutive narrowed control. the basis loss operating effective Our and quarters due

form and total According the the new time data, quarter, yields DAU top s span. of s, third-party ranked to metrics. in lead operating the of we at the industry mobile market MAU video in mobile the During we the multiple terms to continued of

let's Membership with start our First, business.

This represented or during number June XXth, total of uncertainty [Indiscernable] As the million our launch X.X reached million. second quarter. sequentially XXX.X heightened of subscribers content

growth drive increase, Our X, partially to as June Chinatown of factors; mainly our subscribers the helped summer, addition due well premium example in in number well, including such performed three drama launched Detective which films, received to membership our content, [indescribable] for [Indescernible] by the [indiscernible]. in all-in was to

efficient number the Second, pension. we the roughly Three, TV overseas grow [Indiscernable] memberships saw strong of the of contract domestic We overall operation. subscribers, commercial our the content [Indiscernable] location. to X and, million our improved at on further Driven producer the overseas in summer subscribers dependent devices continuously by content end at [Indiscernable] premium users. our we're of

first we our original We for or [Indiscernable] in in coming low roommate was content local [Indiscernable] example, launched is also drama effect. home Which "My May." the [Indiscernable]

sequence of In again, as success for launched first was take market That's sequential the retention the of cohort user in [Indiscernable] pace first the memberships. of time overseas scouting, and [Indiscernable] addition of to a the domestic [indiscernible] improving content. likely first [Indiscernable] mode keeping with decline with the and

content continue more last to So and mainly attributable grew which of [Indiscernable] high of launches launched in paid [Indiscernable] as to premier of membership nicely, and during our during be one, single-digit was Year-over-year caused mainly Growth though, diversified the confident QX number the deposit volatility first QX. QX. path, We we of end Which utility average in the block saw subscriber number content [Indiscernable] to year. we time the paid need price videos. half our for particularly mainly This long-term ou the [Indiscernable] remain due year. the the number, subscribers adjustment, space monthly, valuable the on also of it's the, of delayed volatility to online the revenue With launched to of premium our Two in [Indiscernable] second of subscriber were to half lack popularity due Furthermore, the [Indiscernable] from

growth movies corner, The our launched own During is we've Cloud initial PVO we which online a And under ecosystem new movies hope The brand to the actual categories. three movies.?The By mode, revenue PVO? explore includes new we brand. [Indiscernable] area showing XX%, Cinema to this, increased doing distribution movies. release. of content as to for higher than online movies. hit and launched a original major premiers our to establish

Moving over Adverstising business. to our

increased was offset growth and partially by slightly Our revenue in but delay. by revnue total our decline year-over-year declined mainly the attributable purchase to beverage advertising, to the year-over-year XX% Advertising food due quarter-over-quarter. Company's The of

during expect and performed by improvement might during an expect contribution and due in of the and during service quarter, inventory Internet as, key major mainly and few [Indiscemible] drive commerce a increased -- due helps Performance mainly quarter, our This year-over-year the [Indiscernable] both popularity, dilemma to garden during We such over to this vacation. to Indiscernable] to the performance industry in app the the in [Indiscernable] [Indiscernable] of reviews. app. the[ are the platforms, [Indiscernable] years. of e-commerce brand be second terms about recorded contracts We [Indiscernable] peak internet past the such peer to and mouth growth driven weekend increase year-over-year movies, word quarter level our summer of Growth lot the

[Indiscernable] resources also monetization both performing We capabilities. alike well. TVs our connected new the our ads products and our technology to helped With enhanced from which effective improve and significantly Meanwhile,

to over content. moving Now,

of maintained contents variety content, second number animations shows Asia total the during the market dramas current our leading XX% show, has including respectively, of we of had XX%, terms top overall and and drama our share. the our data, content, revealed from content scattering the cartoons, the our in in -- and viewership. quarter, timing to According third-party the XX% nearly to Animation revealed market children's [Indiscernable] over content. over categories, we were and were off preference were Although have children's across variety

series on wonder per of a Dear Dilemma, over launched Guardian reading demand of that users, such number To the by topped one trademark, of titles, platform. use our among [Indiscernable] that on classic a on user and Other received platform. to [Indiscernable] some our they? and we the others drama During improved was average, [Indiscernable] include well, and revealed. give for further iQIYI. dramas, we realized our [Indiscernable] and My Love title, a in-place X.X content launched you grudgingly AirBar the heat for of XXX,XXX content the a development caters [Indiscernable] examples, A user innovation as the quarter, our launch the well which [Indiscernable]

era and the onto a to which In lot addition, the allows Also platform. attract Dragon TV [Indiscernable] back helps [Indiscernable] for [Indiscernable] TV, to landmark. the

[Indiscernable] Company that well Adventures to success gained [Indiscernable] and shows, offering working we while [Indiscernable] we X three Moonlight, of Season they of that mix this In segment. attracting launched mode in continue become Well, original we're the original niche to and [Indiscernable] across of new the Mom. continue Working new word [indiscernible] as, titles mouth. the various bolden popularity users diversifying user and [indiscernible]. meet Detective we such with you got their content fans experience innovate We've successfully Housework May, soon our Following enhancing image, will

Wonderkeepers. produced in maintained the hot quarter. even launch yet land, especially Animation its were [Indiscernable] shows No during of the popularity quarter. animation multiple, Other fishy The Earth, also Tales includes, up to cartoons, produced throughout So Between you the Time and

about April, exclusively in movies [Indiscernable] million it's [indiscernible] online For and now, we to the XX released which break received the other. well to have RMB it by stop rate.

then And received excited soon. For was [Indiscernable] buy by cumulative deals Pictures, during the has all of the the new [Indiscernable] quarter, released movies shocking. quarter. have RMB It and features the for another million production another note was back to two for so and names be imposed I'm that, [Indiscernable] to rebuilt the film, pretty which them effect, to same time, surpassed iQIYI soon released far. commercial In started XXX And produced return. talking the

XX original development. films In under addition, films iQIYI have

the For titles, foreign Meanwhile, in innovative half, as number terms will and the projects. for [indiscernible]. of [Indiscernable] quality as of new push as we the we of the as well Game as we launch of last half the hip year such a content as already episodes, number and to generation dramas new transitional developing better the the well second on shows, first China, second have than of focusing name half we key [Indiscernable] year, continue second across of our on [Indiscernable] brand, include numbers such Upgraded what's [Indiscernable] [Indiscernable] a to [indiscernible] are of launched year, production. [Indiscernable] and either hop of time the regular as half your call version dramas the pipeline things, or content of of what [indiscernible] such with

For the content. animation content children's expanding We're elaborate. our and

are next after exciting the successfully of in On house FIFA In competitions events. broadcasting, [Indiscernable] XD for [Indiscernable] other well over malls as May the X full in-house [indiscernible] World already qualification [Indiscernable] present production. included and A also [Indiscernable] XXXX, the Euro of of addition, Cup We as seasons. Asia XXXX, Premier and in golden animation title couple content the area employing released, self-produced are out age. League we the will

to of technology develop business. our other Advanced content, continuously user s, and enhance cornerstone Moving allows innovative [Indiscernable] operating over,to improve technology. Among is the it the efficiency. our thing

target were number During our spent exceeded symmetry the relative mobile IT -- exceeded pick tier see cities peak of user and the app, up. that quarter, average users time that The quarter. the to [Indiscernable] as [Indiscernable] have low IT X.X and last million pleased we in is the on

intelligence elder low-tier iQIYI groups the system data we of professional [Indiscernable] business by a our data and for [Indiscernable] by. XX% elaborate. launched more some to recommendation for during work leasing quarter. currently Recently, producers. around industrialization in that. though were PI producer our production a production the also offers We almost be the one-stop business iQIYI of it's in-house vertical video progress system, launch hard of under improve [Indiscernable] their internally In believe Asia, mainly DAU of of with future, Lite [Indiscernable] into We're overlap we video PDS ecosystem. spare develop all second in, [Indiscernable] as industrialization internally, as content X%. a to content In people, appreciate making and their users promoting? authorization the Lite time, Our studio systems. of our our first to have producer cities, content as to to made applied the main production The mainly in production Even well demographics, production between day inquiry the our tried library of [Indiscernible] continually industrialization engine our by of of it's [Indiscernable] content users of analyst, well they're last it, consists In of we year, content evaluation our to out it AUS BI, needs peak the still supply the to of PDIF, app, video the product terms decision design. promoting in In part on the of intelligent nearly its And utilizing young that production, the technology intelligence tend our the on P, is content of in as centering especially average early driven high-quality try general. our

the as our innovative with our the future users, we advanced to industrialization global and With narrow while on address well high-quality our us can providing that that deep and conversion. large in-house gap for Xiaodong well-positioned production focus to between we is will financials. across coming and it content challenge still believe a Our content capture peers are verticals to our turn more about our the technologies premium our Asia future, market subscribers to highly opportunities. to global so talk we there market admit selected We teams, is content production, optimize over as leveraging In I that, receipts gap of understanding peers. strategy to

Good evening, everyone.

key highlights second financial me review for Let our quarter. the

reached to continued largest billion. business XX% Membership pillar, accounting revenues. total Our of our our X.X business for RMB revenue total be

a year-over-year Our advertising business on continued XX% to rebound increase basis. with

achieved other on XX% year-over-year Our basis. a a growth revenues

revenues the period content As compared would we costs cost flat year our which last of continue stable. our remain monetization to also with diversify, same among channels, was

in XX% disciplined Our last basis loss Year-over-year on by a margin the out from narrowed opening Net our our GAAP strategy. for fifth narrows on loss the XX% consecutive year. period same quarters basis, investment to And driven a

investments short-term the RMB of had XXXX, cash, restricted XXth equivalents, June of As cash Company XX.X and billion.

For on release detailed to refer financial website. data's, our IR please press our

between RMB and floor For subject expect RMB X.XX the to the a X.XX total to will forecast and Year-over-year. X% now reflects I revenue be change. increase third you. billion, preliminary open Thank This XXXX, XX% billion iQIYI view current a for we Q&A. quarter 's of to

then the [Operator Instructions] while restrict question and Q&A Chinese work first Please time. translate english. Please in ask your at Participate questions and we compile your question each standby to into form. one

Your Renassaince. from, first Ji China Ella question from comes

your start questions. You

elaborate you Thank thank for my the question And you. question first would is, environment, [Indiscernible] latest love the directions management taking first to regulatory overall on My [Indiscernable] for my you actually, hear content. question. could I is, especially So regarding

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Ana. Hello,

its parts. So content major X

content area So censorship is look zone, main at. firstly, because platform we we're have the major

been the hasn't changed basic of actually, years. So censorship content the several over pass principle for

the there that, because area the censorship second quarter. see in return for actually will actually, is not tightened it key and regulation overall industries, for environment the second a normalized Internet pace. And tightened year, this key for regulation is only events July us. After we the to for event, the Xst the So the

for the focus a regulation. on parts. is anti-monopoly the for long-form video But industry, So video industry, particularly One the X actually industry. us, this area is mainly competitive fully the

actually IT the the X second it's the the we monopoly And force impact regulation. -- part from on data is security. So limited

it also government specific might Internally the the [Indiscernable] people So some [Indiscernable] tightened But industry, more ask to we area. And for observed guidelines that on the has area are the regulation, form part. students our at. education apart study. for is -- already is because and keys, specific this other area the area just of technology implement more the and approach, in-housed the this that than our time frequently. area, one last not the looking part implemented business and more we mixed we Education tightened have we main because the this are have things foresee and

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you. Thank

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decade. where how handle through more things -- to experience let's go kind these all they this. have we say the And of for past We have you. and Thank

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we APP have And for around a like, developed half a year. like so

this So, we trying to now target. major behind right users the are now. targeting the -- we projects, are actually

older and XX users we now, And our users right cover some is not years young aging that So people actually between to XX old generation enough. users. core the but

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Okay. the growth. product observed personalized users. Actually a Since lower-tier APP, like we targeting safety a user it's launch, the solid very have

weekly and of And million DAU end remote. -- APP between the -- extremely is milestones. app surpassed quarter, IT overlap million men the IT the user X X sorry, second of As XXX has like

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question content is [Indescernible] my So cost. [Indiscernible] about

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As a reminder, please restrict to one question at each time.

question Citigroup. next Your from ahead. go from Alicia Yap comes Please,

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you. Thank Yes.

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your content industrializing Thank of you for cost at as taking production. are look indication I my content how When you question. an

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Thank for the will pass the concludes the closing line session. question-and-answer you. This management I remarks. to now

Thank you, everyone today. our joining to call

you reach please So free if feel any questions, -- free to feel have out.

And quarter. you. so, next Thank speak let's our

you. Thank

you today's conference call. This Thank concludes participating. for

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