iQIYI Announces Third Quarter 2022 Financial Results
BEIJING, November 22, 2022 – 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 third quarter ended September 30, 2022.

Third Quarter 2022 Highlights
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Total revenues were RMB7.5 billion (US$1.1 billion1), decreasing 2% year over year.
Operating income was RMB309.7 million (US$43.5 million) and operating income
margin was 4%, compared to operating loss of RMB1.4 billion and operating loss
margin of 18% in the same period in 2021.
Non-GAAP operating income2 was RMB524.3 million (US$73.7 million) and nonGAAP operating income margin was 7%, compared to non-GAAP operating loss of
RMB1.1 billion and non-GAAP operating loss margin of 14% in the same period in
2021.
Net loss attributable to iQIYI was RMB395.6 million (US$55.6 million), compared to
net loss attributable to iQIYI of RMB1.7 billion in the same period in 2021.
Non-GAAP net income attributable to iQIYI2 was RMB187.2 million (US$26.3
million), compared to non-GAAP net loss attributable to iQIYI of RMB1.4 billion in
the same period in 2021.

“We have completed an iconic turnaround during the first three quarters this year, withbusiness performance far exceeding our targets set at the beginning of the year.”commented Mr. Yu Gong, Founder, Director, and Chief Executive Officer of iQIYI. “Ouroriginal blockbusters drove significant net subscriber additions within the quarter, further
expanding our market leadership. As a result, we achieved operating profit growth while
continuing to gain market share. We remain confident in our ability to generate value forour stakeholders who share our belief in the prospects of long-form video.”“We made great strides by growing non-GAAP operating profit for four consecutive
quarters. Meanwhile, we have generated positive operating cash flow for two consecutive
quarters.” commented Mr. Jun Wang, Chief Financial Officer of iQIYI. “Our commitment
to achieving healthy business growth remains unchanged.”
Third Quarter 2022 Financial Highlights
Three Months Ended(Amounts in thousands of Renminbi (“RMB”), except for per
ADS data, unaudited)

September 30,

June 30

September 30,

2021

2022

2022

RMB

RMB

RMB

Total revenues

7,589,104

6,656,549

7,471,081

Operating (loss)/income(1,367,958)

125,787309,665

Operating (loss)/income (non-GAAP)(1,072,950)

343,806

524,347

Net loss attributable to iQIYI, Inc.

(1,729,560)(213,995)(395,569)

Net (loss)/income attributable to iQIYI, Inc. (non-GAAP)(1,399,458)

78,253

187,207(2.17)(0.28)(0.46)(1.76)

0.10

0.21

Diluted net loss per ADS
Diluted net (loss)/income per ADS (non-GAAP)

2

Third Quarter 2022 Other Operating Highlights●●

The average daily number of total subscribing members3 for the quarter was 101.0
million, compared to 104.7 million for the same period in 2021 and 98.3 million forthe second quarter in 2022. The average daily number of subscribing members
excluding individuals with trial memberships4 for the quarter was 100.2 million,
compared to 103.8 million for the same period in 2021 and 97.7 million for the second
quarter in 2022.
The monthly average revenue per membership (ARM5) for the quarter was RMB13.90,
compared to RMB13.65 for the same period in 2021 and RMB14.53 for the second
quarter in 2022, increasing 2% year over year.

Footnotes:[1]
Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB7.1135 as of September 30, 2022, as set forth in
the H.10 statistical release of the Board of Governors of the Federal Reserve System. Translations are provided solely for theconvenience of 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).
[3]
The average daily number of total subscribing members for a quarter is calculated by averaging the number of total subscribing
members in each day of such quarter.
[4]
The average daily number of subscribing members excluding individuals with trial memberships for the quarter is calculated byaveraging the number of subscribing members excluding individuals with trial memberships in each day of such quarter.
[ 5]
The monthly ARM for the quarter is calculated by dividing our total revenues from membership services during a given quarter by
the average daily number of total subscribing members for that quarter and the number of months in the quarter.

Third Quarter 2022 Financial Results
Total revenues reached RMB7.5 billion (US$1.1 billion), decreasing 2% year over year.
Membership services revenue was RMB4.2 billion (US$591.9 million), decreasing 2%
year over year. In the third quarter, key titles were launched toward the second half of thequarter, resulting in the number of subscribing members grew from a lower base of 95.6
million as of June 30, 2022 to 106.2 million as of September 30, 2022.
Online advertising services revenue was RMB1.2 billion (US$175.3 million), decreasing
25% year over year, primarily due to challenging macroeconomic environment.
Content distribution revenue was RMB729.7 million (US$102.6 million), increasing 16%
year over year, primarily attributable to the increase in the value of barter transactions.
Other revenues were RMB1.3 billion (US$180.4 million), increasing 27% year over year,
primarily attributable to the revenue derived from the third-party cooperation and partly
offset by the soft performance of various business lines.

Cost of revenues was RMB5.7 billion (US$802.0 million), decreasing 19% year over year,
primarily due to lower content costs during the quarter. Content costs as a component ofcost of revenues were RMB4.3 billion (US$609.4 million), decreasing 18% year over year.
The decrease in content cost was driven by our improvement in content strategy andimprovement in operating efficiency.
Selling, general and administrative expenses were RMB980.3 million (US$137.8 million),decreasing 21% year over year, primarily due to the decrease in marketing spending, sharebased compensation expenses, and personnel-related compensation expenses.
Research and development expenses were RMB475.9 million (US$66.9 million),decreasing 30% year over year, primarily due to the decrease of personnel-relatedcompensation expenses.
Operating income was RMB309.7 million (US$43.5 million), compared to operating lossof RMB1.4 billion in the same period in 2021. Operating income margin was 4%,compared to operating loss margin of 18% in the same period in 2021. Non-GAAP
operating income was RMB524.3 million (US$73.7 million) and non-GAAP operating
income margin was 7%, compared to non-GAAP operating loss of RMB1.1 billion and
non-GAAP operating loss margin of 14% in the same period in 2021.
Total other expense was RMB662.0 million (US$93.1 million), compared to total otherexpense of RMB330.5 million during the same period of 2021. The year over year increase
was a combined result of increase in the impairment provision due to the fair value changes
from selected investee companies, the foreign exchange loss driven by the appreciation of
U.S. dollar against Renminbi, as well as decreased interest expenses mainly due to lessprincipal amount of convertible bond and the adoption of ASU 2020-06, Accounting forConvertible Instruments and Contracts in an Entity’s Own Equity.
Loss before income taxes was RMB352.4 million (US$49.5 million), compared to loss
before income taxes of RMB1.7 billion in the same period in 2021.
Income tax expense was RMB42.5 million (US$6.0 million), compared to income tax
expense of RMB9.0 million in the same period in 2021.
Net loss attributable to iQIYI was RMB395.6 million (US$55.6 million), compared to net
loss attributable to iQIYI of RMB1.7 billion in the same period in 2021. Diluted net loss
attributable to iQIYI per ADS was RMB0.46 (US$0.06) for the third quarter of 2022,
compared to diluted net loss attributable to iQIYI per ADS of RMB2.17 in the same periodof 2021. Non-GAAP net income attributable to iQIYI was RMB187.2 million (US$26.3
million), compared to non-GAAP net loss attributable to iQIYI of RMB1.4 billion in thesame period in 2021. Non-GAAP diluted net income attributable to iQIYI per ADS was
RMB0.21 (US$0.03), compared to non-GAAP diluted net loss attributable to iQIYI per
ADS of RMB1.76 in the same period of 2021.

As of September 30, 2022, the Company had cash, cash equivalents, restricted cash andshort-term investments of RMB5.0 billion (US$709.5 million).

Conference Call Information
iQIYI’s management will hold an earnings conference call at 6:30 AM on November 22,
2022, U.S. Eastern Time (7:30 PM on November 22, 2022, 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 Registration:
my6ep2.html

https://s1.c-conf.com/diamondpass/10026842-

It will automatically direct you to the registration page of "iQIYI Third Quarter 2022
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 November 29, 2022.
Dial-in numbers for the replay are as follows:
International Dial-in:
Passcode:+1 855 883 1031
10026842

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 forcontinuous innovation and the production of blockbuster content. It produces, aggregatesand distributes a wide variety of professionally produced content, or PPC, as well as abroad spectrum of other video content in a variety of formats. The Company distinguishes
itself in the online entertainment industry by its leading technology platform powered byadvanced 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 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(loss)/income, non-GAAP operating (loss)/income margin, non-GAAP net (loss)/income
attributable to iQIYI, non-GAAP diluted net (loss)/income attributable to iQIYI per ADS
and free cash flow. 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 andpresented in accordance 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 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
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 (loss)/income represents operating (loss)/income excluding sharebased compensation expenses, amortization and impairment of intangible assets resulting
from business combinations and non-recurring employee severance costs.
Non-GAAP net (loss)/income attributable to iQIYI, Inc. represents net loss attributable to
iQIYI, Inc. excluding share-based compensation expenses, amortization and impairmentof intangible assets resulting from business combinations, non-recurring employee
severance costs, disposal gain or loss, impairment of long-term investments, fair valuechange of long-term investments, adjusted for related income tax effects. iQIYI’s share ofequity method investments for these non-GAAP reconciling items, amortization andimpairment of intangible assets not on the investees’ books, accretion of their redeemablenon-controlling interests, and the gain or loss associated with the issuance of shares by theinvestees at a price higher or lower than the carrying value per shares, adjusted for related
income tax effects, are also excluded.
Non-GAAP diluted net (loss)/income per ADS represents diluted net (loss)/income per
ADS calculated by dividing non-GAAP net (loss)/income attributable to iQIYI, Inc, whichis adjusted for accretion for the redeemable non-controlling interests, 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 Loss
(In RMB thousands, except for number of shares and per share data)

Three Months Ended
September 30,
2021
RMB(Unaudited)

June 30,
2022
RMB(Unaudited)

September 30,
2022
RMB(Unaudited)

Revenues:
Membership services
Online advertising services
Content distribution
OthersTotal revenues

4,288,215
1,660,332
627,134
1,013,423
7,589,104

4,285,071
1,193,809
479,261
698,408
6,656,549

4,210,722
1,247,114
729,698
1,283,547
7,471,081

Operating costs and expenses:
Cost of revenues
Selling, general and administrative
Research and development
Total operating costs and expenses
Operating (loss)/income(7,027,681)(1,246,334)(683,047)(8,957,062)(1,367,958)(5,247,959)(800,602)(482,201)(6,530,762)
125,787(5,705,260)(980,293)(475,863)(7,161,416)
309,665

35,979(351,293)
4,462(17,345)(2,292)(330,489)

15,707(181,907)(98,101)(93,690)
67,006(290,985)

18,631(181,641)(79,768)(69,807)(349,455)(662,040)

Loss before income taxes
Income tax expense(1,698,447)(8,978)(165,198)(352,375)(36,204)(42,501)

Net loss
Less: Net income attributable to noncontrolling interests
Net loss attributable to iQIYI, Inc.
Accretion of redeemable noncontrolling interests(1,707,425)
22,135(1,729,560)(4,769)(1,734,329)(201,402)
12,593(394,876)
693(213,995)(213,995)(395,569)(395,569)

Net loss per share for Class A and Class B ordinary shares:
Basic
Diluted(0.31)(0.31)(0.04)(0.04)(0.07)(0.07)Net loss per ADS (1 ADS equals 7 Class A ordinary shares):
Basic
Diluted(2.17)(2.17)(0.28)(0.28)(0.46)(0.46)

Basic

5,590,418,635 6,074,616,616

6,081,974,163

Diluted

5,590,418,635 6,074,616,616

6,081,974,163

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

Net loss attributable to ordinary shareholders

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

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

December 31,
2021
RMB

September 30,
2022
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

2,997,212
77,652
1,348,255
2,747,774
3,266,523
155,512931,189
11,524,117

3,559,899
16,355
1,470,487
2,683,392
2,228,050
70,430818,171
10,846,784

Non-current assets:
Fixed assets, net
Long-term investments
Deferred tax assets, net
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

1,344,784
3,035,155
31,351
7,258,042
545,305
10,951,078
2,905,690
907,297
3,888,346
81,00030,948,048

1,180,895
2,803,629
7,146,338
459,635
12,711,616
3,037,253
704,025
3,888,346
114,000
32,045,737

42,472,165

42,892,521

8,896,460
2,634,089
3,484,509
4,117,774
171,541
3,172,097
22,476,470

6,882,120
3,319,678
3,968,708
8,520,577
3,938,938
110,697
2,408,709
29,149,427

12,652,172
3,127
780,615625,737
260,931
14,322,582

6,369,982
2,682
105,056
527,584
1,286,875
8,292,179

36,799,052

37,441,606

397,385-Class A ordinary sharesClass B ordinary shares
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive income
Noncontrolling interests
Total shareholders’ equity

173
183
49,642,014(47,163,773)
2,709,002
88,1295,275,728

193
193
50,676,861(46,803,156)
1,482,263
94,5615,450,915

Total liabilities, redeemable noncontrolling interests and shareholders' equity

42,472,165

42,892,521

Total assets
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS’
EQUITY
Current liabilities:
Accounts and notes payable
Amounts due to related parties
Customer advances and deferred revenue
Convertible senior notes, current portion
Short-term loans
Operating lease liabilities, current portion
Accrued expenses and other liabilities
Total current liabilities
Non-current liabilities:
Convertible senior notes
Deferred tax liabilities
Amounts due to related parties
Operating lease liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
Redeemable noncontrolling interests
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
September 30,
2021
RMB(Unaudited)(2,080,544)

47,359195,724

Net cash provided by/(used for) investing activities (1)1,885,081
867,420(652,454)(333,393)

406,840(105,876)(22,206)

75,09660,182649,751(863,392)

556,870

Net cash (used for)/provided by operating activities
Less: Capital expenditures (2)Free cash flow(2)

September 30,
2022
RMB(Unaudited)

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

(1)

June 30,
2022
RMB(Unaudited)(2,080,544)

47,359195,724(116,320)(66,005)(48,143)(2,196,864)(18,646)

147,581

Net cash provided by or used for investing activities primarily consists of net cash flows from investing in debt securities, purchase oflong-term investments and capital expenditures.
Capital expenditures are incurred primarily in connection with leasehold improvements, 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

Operating (loss)/income

September 30,

June 30,

September 30,

2021

2022

2022

RMB

RMB

RMB

(1,367,958)

125,787309,665

Add: Share-based compensation expenses

281,198

201,521204,770

Add: Amortization and impairment of intangible assets(1)13,81016,498

9,912

Operating (loss)/income (non-GAAP)(1,072,950)

343,806

524,347

Net loss attributable to iQIYI, Inc.

(1,729,560)(213,995)(395,569)

Add: Share-based compensation expenses

281,198

201,521204,770

Add: Amortization and impairment of intangible assets(1)13,81016,4989,912

Add: Impairment of long-term investments

29,00011,000376,339

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

8,061

1,760

(26,652)

Add: Reconciling items on equity method investments

3,066

59,615

16,323

Add: Tax effects on non-GAAP adjustments(2)(5,033)

1,854

2,084

(1,399,458)

78,253

187,207

Diluted net loss per ADS(2.17)(0.28)(0.46)

Add: Non-GAAP adjustments to net loss per ADS

0.41(1.76)

0.38
0.10

0.67
0.21

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

Diluted net (loss)/income per ADS (non-GAAP)

(1)
(2)

This represents amortization and impairment of intangible assets resulting from business combinations.
This represents tax impact of all relevant non-GAAP adjustments.