iQIYI Announces First Quarter 2024 Financial Results
BEIJING, CHINA, May 16, 2024 – iQIYI, Inc. (Nasdaq: IQ) ("iQIYI" or the "Company"),a leading provider of online entertainment video services in China, today announced its
unaudited financial results for the first quarter ended March 31, 2024.

First Quarter 2024 Highlights
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Total revenues were RMB7.9 billion (US$1.1 billion1), decreasing 5% year over year.
Operating income was RMB944.8 million (US$130.8 million) and operating income
margin was 12%, compared to operating income of RMB858.6 million and operating
income margin of 10% in the same period in 2023.
Non-GAAP operating income2 was RMB1.1 billion (US$150.4 million) and nonGAAP operating income margin was 14%, compared to non-GAAP operating incomeof RMB1.0 billion and non-GAAP operating income margin of 12% in the same period
in 2023.
Net income attributable to iQIYI was RMB655.3 million (US$90.8 million), comparedto net income attributable to iQIYI of RMB618.1 million in the same period in 2023.
Non-GAAP net income attributable to iQIYI2 was RMB844.3 million (US$116.9
million), compared to non-GAAP net income attributable to iQIYI of RMB939.5
million in the same period in 2023.

“Our operating profits and corresponding margins reached historical highs, thanks to ourquality execution and increased operating efficiency,” commented Mr. Yu Gong, Founder,
Director, and Chief Executive Officer of iQIYI. “The initial integration of generative AI
into our operations is already yielding promising results. We are eager to harness the powerof this innovative technology to improve our capacity for delivering top-tier content and to
expand our growth possibilities.”“We have been generating positive operating cash flow for eight consecutive quarters, andour balance sheet continued to improve,” commented Mr. Jun Wang, Chief Financial
Officer of iQIYI. “This makes our business more defensible and offers us more tools toimprove shareholder value over time.”

First Quarter 2024 Financial Highlights
Three Months Ended(Amounts in thousands of Renminbi (“RMB”), except for per ADS data,
unaudited)

March 31,

December 31,

March 31,

2023

2023

2024

RMB

RMB

RMB

Total revenues

8,348,807

7,706,468

7,927,355

Operating income

858,631

773,709944,753

1,034,296

927,818

1,085,762

Operating income (non-GAAP)Net income attributable to iQIYI, Inc.

618,109466,233

655,317

Net income attributable to iQIYI, Inc. (non-GAAP)939,533

682,026

844,325

Diluted net income per ADS

0.64

0.48

0.68

Diluted net income per ADS (non-GAAP)2

0.97

0.70

0.87

Footnotes:[1]
Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB7.2203 as of March 29, 2024, 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 convenienceof the reader.
[ 2]
Non-GAAP measures are defined in the Non-GAAP Financial Measures section (see also “Reconciliations of Non-GAAP Financial
Measures to the Nearest Comparable GAAP Measures” for more details).

First Quarter 2024 Financial Results
Total revenues reached RMB7.9 billion (US$1.1 billion), decreasing 5% year over year.
Membership services revenue was RMB4.8 billion (US$664.6 million), decreasing 13%
year over year. The decrease was primarily due to the high base effect in the same period
last year.
Online advertising services revenue was RMB1.5 billion (US$205.3 million), increasing
6% year over year. The increase was primarily driven by the growth of performance-based
advertising business.
Content distribution revenue was RMB928.0 million (US$128.5 million), increasing 27%
year over year, primarily driven by the distribution of several major titles.
Other revenues were RMB718.4 million (US$99.5 million), increasing 8% year over year,
primarily driven by the increase of revenue derived from third-party cooperation.
Cost of revenues was RMB5.6 billion (US$779.9 million), decreasing 5% year over year.
Content costs as a component of cost of revenues were RMB4.0 billion (US$553.5 million),decreasing 5% year over year. The decrease in content cost was driven by our improvement
in content strategy and operating efficiency.
Selling, general and administrative expenses were RMB922.0 million (US$127.7 million),decreasing 17% year over year. The decrease was primarily due to disciplined marketing
spending and reversal of allowance for credit losses.
Research and development expenses were RMB429.3 million (US$59.5 million), flat year
over year.
Operating income was RMB944.8 million (US$130.8 million), increasing 10% year overyear. Operating income margin was 12%, compared to operating income margin of 10% in
the same period in 2023. Non-GAAP operating income was RMB1.1 billion (US$150.4

million), increasing 5% year over year. Non-GAAP operating income margin was 14%,compared to non-GAAP operating income margin of 12% in the same period in 2023.
Total other expense was RMB261.3 million (US$36.2 million), increasing 25% year overyear, primarily due to loss from foreign exchange, less interest income and non-operating
income related to the repurchase of convertible senior notes, partially offset by less loss
pick-up from equity method investments.
Income before income taxes was RMB683.5 million (US$94.7 million), compared toincome before income taxes of RMB650.4 million in the same period in 2023.
Income tax expense was RMB17.6 million (US$2.4 million), compared to income tax
expense of RMB24.6 million in the same period in 2023.
Net income attributable to iQIYI was RMB655.3 million (US$90.8 million), increasing 6%
year over year. Diluted net income attributable to iQIYI per ADS was RMB0.68 (US$0.09)
for the first quarter of 2024, compared to diluted net income attributable to iQIYI per ADS
of RMB0.64 in the same period of 2023. Non-GAAP net income attributable to iQIYI was
RMB844.3 million (US$116.9 million), decreasing 10% year over year. Non-GAAP
diluted net income attributable to iQIYI per ADS was RMB0.87 (US$0.12), compared to
non-GAAP diluted net income attributable to iQIYI per ADS of RMB0.97 in the same
period of 2023.
Operating cash flow was RMB937.8 million (US$129.9 million), compared to operating
cash flow of RMB1.0 billion in the same period of 2023. Free cash flow was RMB915.3
million (US$126.8 million), compared to free cash flow of RMB1.0 billion in the same
period of 2023.
As of March 31, 2024, the Company had cash, cash equivalents, short-term investments
and long-term restricted cash included in prepayments and other assets of RMB7.3 billion(US$1.0 billion).

Conference Call Information
iQIYI's management will hold an earnings conference call at 7:00 AM on May 16, 2024,
U.S. Eastern Time (7:00 PM on May 16, 2024, 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, passcode and uniqueaccess PIN by a calendar invite.
Participant Online
kjuy76.html

Registration:

https://s1.c-conf.com/diamondpass/10038227-

It will automatically direct you to the registration page of "iQIYI First Quarter 2024
Earnings Conference Call ", where you may fill in your details for RSVP.
In the 10 minutes prior to the call start time, you may use the conference access information(including dial-in number(s), passcode and unique access PIN) provided in the calendar
invite that you have received following your pre-registration.
A telephone replay of the call will be available after the conclusion of the conference callthrough May 23, 2024.
Dial-in numbers for the replay are as follows:
International Dial-in+1 855 883 1031
Passcode:10038227
A live and archived webcast of the conference call will be available at http://ir.iqiyi.com/.

About iQIYI, Inc.
iQIYI, Inc. is a leading provider of online entertainment video services in China. It
combines creative talent with technology to foster an environment for continuous
innovation and the production of blockbuster content. It produces, aggregates anddistributes a wide variety of professionally produced content, as well as a broad spectrumof other video content in a variety of formats. iQIYI distinguishes itself in the online
entertainment industry by its leading technology platform powered by advanced AI, bigdata analytics and other core proprietary technologies. Over time, iQIYI has built a massiveuser base and developed a diversified monetization model including membership services,
online advertising services, content distribution, online games, IP licensing, talent agency,
online literature, etc.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made underthe "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 quotations from management in thisannouncement, 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 toshareholders, in press releases and other written materials and in oral statements made byits 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 forwardlooking statements. Forward-looking statements involve inherent risks and uncertainties.
A number of factors could cause actual results to differ materially from those contained inany forward-looking statement, including but not limited to the following: iQIYI's

strategies; iQIYI's future business development, financial condition and results ofoperations; iQIYI's ability to retain and increase the number of users, members andadvertising 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 thepress 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 the following non-GAAP financial measures: non-GAAP operating income,non-GAAP operating income margin, non-GAAP net income attributable to iQIYI, nonGAAP diluted net income attributable to iQIYI per ADS and free cash flow. The
presentation of the non-GAAP financial measure is not intended to be considered inisolation or as a substitute for the financial information prepared and presented inaccordance with GAAP.
iQIYI believes that these non-GAAP financial measures provide meaningful supplemental
information regarding its operating performance by excluding certain items that may not
be indicative of its business operating results, such as operating performance excluding
non-cash charges or non-operating in nature. The Company believes that both management
and investors benefit from referring to the non-GAAP financial measures in assessing its
performance and when planning and forecasting future periods. These non-GAAP financial
measures also facilitate management’s internal comparisons to iQIYI’s historical operating
performance. The Company believes the non-GAAP financial measures are useful toinvestors in allowing for greater transparency with respect to supplemental information
used by management in its financial and operational decision making. A limitation of using
these non-GAAP financial measures is that the non-GAAP measures 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. These non-GAAP financial measures presented
here may not be comparable to similarly titled measures presented by other companies.
Other companies may calculate similarly titled measures differently, limiting theirusefulness as comparative measures to the Company’s data.
Non-GAAP operating income represents operating income excluding share-based
compensation expenses, amortization of intangible assets resulting from businesscombinations.
Non-GAAP net income attributable to iQIYI, Inc. represents net income attributable to
iQIYI, Inc. excluding share-based compensation expenses, amortization of intangible
assets resulting from business combinations, disposal gain or loss, impairment of long-term
investments, fair value change of long-term investments, adjusted for related income tax

effects. iQIYI’s share of equity method investments for these non-GAAP reconciling items,
primarily amortization and impairment of intangible assets not on the investees’ books,
accretion of their redeemable non-controlling interests, and the gain or loss associated with
the issuance of shares by the investees at a price higher or lower than the carrying value
per share, adjusted for related income tax effects, are also excluded.
Non-GAAP diluted net income per ADS represents diluted net income per ADS calculatedby dividing non-GAAP net income attributable to iQIYI, Inc, by the weighted average
number of ordinary shares expressed in ADS.
Free cash flow represents net cash provided by operating activities less capital expenditures.
For more information, please contact:
Investor Relations
iQIYI, Inc.
ir@qiyi.com

iQIYI, INC.
Condensed Consolidated Statements of Income(In RMB thousands, except for number of shares and per share data)

Three Months Ended
March 31,2023
RMB
(Unaudited)

December 31,
2023
RMB(Unaudited)

March 31,2024
RMB
(Unaudited)

Revenues:
Membership services
Online advertising services
Content distribution
OthersTotal revenues

5,547,305
1,403,752
731,907665,843
8,348,807

4,808,727
1,650,513
506,059
741,169
7,706,468

4,798,861
1,482,052
928,009718,433
7,927,355

Operating costs and expenses:
Cost of revenues
Selling, general and administrative
Research and development
Total operating costs and expenses
Operating income(5,956,003)(1,105,855)(428,318)(7,490,176)
858,631(5,533,082)(947,806)(451,871)(6,932,759)
773,709(5,631,239)(922,035)(429,328)(6,982,602)
944,753

Other income/(expense):
Interest income
Interest expenses
Foreign exchange gain/(loss), net(Loss)/gain from equity method investments
Others, net
Total other expense, net

104,986(285,964)
36,982(85,109)
20,862(208,243)

55,098(284,301)
10,660(1,284)(39,972)(259,799)

58,740(282,135)(31,551)
13,514(19,859)(261,291)

Income before income taxes
Income tax expense

650,388(24,632)

513,910(38,473)

683,462(17,633)

Net income
Less: Net income attributable to noncontrolling interests
Net income attributable to iQIYI, Inc.
Net income attributable to ordinary shareholders

625,756
7,647
618,109618,109475,437
9,204
466,233
466,233

665,829
10,512655,317655,317

Net income per share for Class A and Class B ordinary shares:
Basic
Diluted

0.09
0.09

0.07
0.07

0.10
0.10

Net income per ADS (1 ADS equals 7 Class A ordinary shares):
Basic
Diluted

0.66
0.64

0.49
0.48

0.68
0.68

6,569,658,687
6,754,965,091

6,713,897,712
6,834,735,594

6,717,652,924
6,788,073,126

Weighted average number of Class A and Class B ordinary shares used in net
income per share computation:
Basic
DilutediQIYI, INC.
Condensed Consolidated Balance Sheets(In RMB thousands, except for number of shares and per share data)

December 31,
2023
RMB

March 31,2024
RMB
(Unaudited)

ASSETS
Current assets:
Cash and cash equivalents
Restricted cash
Short-term investments
Accounts receivable, net
Prepayments and other assets
Amounts due from related parties
Licensed copyrights, net
Total current assets

4,434,525
6,120
941,738
2,169,042
2,794,259
1,707,024
582,521
12,635,229

5,045,322
985,970
2,727,305
2,602,327
1,716,816
724,610
13,802,350

Non-current assets:
Fixed assets, net
Long-term investments
Licensed copyrights, net
Intangible assets, net
Produced content, net
Prepayments and other assets
Operating lease assets
Goodwill
Amounts due from related parties
Total non-current assets

863,8132,260,785
6,966,508
309,534
13,376,985
3,518,210
683,897
3,820,823
158,590
31,959,145

845,380
2,217,918
6,920,485
333,395
13,613,389
3,845,572
661,1713,820,823
239,328
32,497,461

44,594,374

46,299,811

5,671,074
2,953,658
4,373,208
2,802,442
3,571,637
2,000
100,8832,866,632
22,341,534

5,897,266
2,839,277
4,650,902
2,854,578
3,520,199
23,00097,214
3,111,662
22,994,098

97,9908,143,994
824
80,566
523,747
1,220,804
10,067,925

326,830
8,357,217
560
75,569499,599
1,276,089
10,535,864

32,409,459

33,529,962

Class A ordinary sharesClass B ordinary shares
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive income
Non-controlling interests
Total shareholders’ equity

237
193
54,971,469(44,573,428)
1,688,047
98,397
12,184,915

237
193
55,122,923(43,918,111)
1,508,392
56,215
12,769,849

Total liabilities and shareholders' equity

44,594,374

46,299,811

Total assets
LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent liabilities:
Accounts and notes payable
Amounts due to related parties
Customer advances and deferred revenue
Convertible senior notes, current portion
Short-term loans
Long-term loans, current portion
Operating lease liabilities, current portion
Accrued expenses and other liabilities
Total current liabilities
Non-current liabilities:
Long-term loans
Convertible senior notes
Deferred tax liabilities
Amounts due to related parties
Operating lease liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities

Shareholders’ equity:

iQIYI, INC.
Condensed Consolidated Statements of Cash Flows(In RMB thousands, except for number of shares and per share data)

Three Months Ended
March 31,2023
RMB
(Unaudited)
Net cash provided by operating activities

December 31,
2023
RMB(Unaudited)

March 31,2024
RMB
(Unaudited)

1,001,765

633,586

937,773

166,845(1,430,634)(222,755)

Net cash (used for)/provided by financing activities
Effect of exchange rate changes on cash, cash equivalents and restricted cash

(3,356,630)(8,862)(22,484)(31,445)

261,136
14,606

Net (decrease)/increase in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at the beginning of the period
Cash, cash equivalents and restricted cash at the end of the period(2,196,882)
7,861,556
5,664,674(850,977)
6,131,585
5,280,608

990,760
5,280,608
6,271,368

Cash and cash equivalents
Restricted cash
Long-term restricted cash
Total cash and cash equivalents and restricted cash shown in the statementsof cash flows

4,529,267
6,120
1,129,287

4,434,525
6,120
839,963

5,045,322
1,226,046

5,664,674

5,280,608

6,271,368

Net cash provided by operating activities

1,001,765

633,586

937,773(241)(19,231)(22,429)

1,001,524

614,355

915,344,

Net cash provided by/(used for) investing activities (1 2)Reconciliation of cash and cash equivalents and restricted cash:

Less: Capital expenditures (2)Free cash flow

(1) Net cash provided by or used for investing activities primarily consists of net cash flows from loans provided torelated party, investing in debt securities, purchase of long-term investments and capital expenditures.
(2) Capital expenditures are incurred primarily in connection with construction in process, computers and servers.

iQIYI, INC.
Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures(Amounts in thousands of Renminbi (“RMB”), except for per ADS information, unaudited)Three Months Ended
March 31,

December 31,

March 31,

2023

2023

2024

RMB

RMB

RMB

Operating income

858,631

773,709944,753

Add: Share-based compensation expenses

169,046

152,576

139,476

Add: Amortization of intangible assets

(1)

6,619

1,533

1,533

1,034,296

927,818

1,085,762

Net income attributable to iQIYI, Inc.

618,109466,233

655,317

Add: Share-based compensation expenses

169,046

152,576

139,476

Add: Amortization of intangible assets(1)

6,619

1,533

1,533

Add: Impairment of long-term investments

118,984

62,23170,745

Add: Fair value loss/(gain) of long-term investments

9,445

(323)

(22,482)

Add: Reconciling items on equity method investments(2)18,351--

Add: Tax effects on non-GAAP adjustments(3)(1,021)

(224)

(264)

Net income attributable to iQIYI, Inc. (non-GAAP)939,533

682,026

844,325

Diluted net income per ADS

0.64

0.48

0.68

Add: Non-GAAP adjustments to earnings per ADS

0.33

0.22

0.19

Diluted net income per ADS (non-GAAP)

0.97

0.70

0.87

Operating income (non-GAAP)

(1)
(2)

(3)

This represents amortization of intangible assets resulting from business combinations.
This represents iQIYI’s share of equity method investments for other non-GAAP reconciling items, primarily
amortization and impairment of intangible assets not on the investee’s books, accretion of their redeemablenoncontrolling interests, and the gain or loss associated with the issuance of shares by the investees at a pricehigher or lower than the carrying value per share.
This represents tax impact of all relevant non-GAAP adjustments.