iQIYI Announces First Quarter 2023 Financial Results
BEIJING, CHINA, May 16, 2023 – 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, 2023.
First Quarter 2023 Highlights
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Total revenues were RMB8.3 billion (US$1.2 billion1), increasing 15% year over year.
Operating income was RMB858.6 million (US$125.0 million) and operating income
margin was 10%, compared to operating income of RMB93.4 million and operating
income margin of 1% in the same period in 2022.
Non-GAAP operating income2 was RMB1.0 billion (US$150.6 million) and nonGAAP operating income margin was 12%, compared to non-GAAP operating incomeof RMB326.6 million and non-GAAP operating income margin of 4% in the same
period in 2022.
Net income attributable to iQIYI was RMB618.1 million (US$90.0 million), comparedto net income attributable to iQIYI of RMB169.1 million in the same period in 2022.
Non-GAAP net income attributable to iQIYI2 was RMB939.5 million (US$136.8
million), compared to non-GAAP net income attributable to iQIYI of RMB162.2
million in the same period in 2022.

“We kicked off the year with an exceptional first quarter. iQIYI originals once again
demonstrated its power, driving our financial performance and market share to new highs,
and expanding our subscriber base by over 17 million net additions,” commented Mr. Yu
Gong, Founder, Director, and Chief Executive Officer of iQIYI. “This demonstrated thesuccess of our high-quality growth strategy.”“This was another record-setting quarter for us. Both total revenues and membershipservices revenue reached all-time high. Meanwhile, our operating income continued to
expand for the sixth consecutive quarter and our operating cash flow also expanded for the
fourth consecutive quarter,” commented Mr. Jun Wang, Chief Financial Officer of iQIYI.
“We have improved profitability, cash flow and balance sheet, and we aim to create morevalue for our stakeholders.”

First Quarter 2023 Financial Highlights
Three Months Ended(Amounts in thousands of Renminbi (“RMB”), except for per ADS data,
unaudited)

March 31,

December 31,

March 31,

2022

2022

2023

RMB

RMB

RMB

Total revenues

7,277,059

7,592,859

8,348,807

Operating income

93,413

783,556

858,631

Operating income (non-GAAP)

326,555

978,681

1,034,296

Net income attributable to iQIYI, Inc.

169,093304,259

618,109

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

162,189

856,374

939,533

Diluted net income per ADS

0.21

0.35

0.64

Diluted net income per ADS (non-GAAP)2

0.20

0.98

0.97

First Quarter 2023 Other Operating Highlights●●

The average daily number of total subscribing members3 for the quarter was 128.9
million, compared to 101.4 million for the same period in 2022 and 111.6 million for
the fourth quarter in 2022. The average daily number of subscribing members
excluding individuals with trial memberships4 for the quarter was 128.1 million,
compared to 100.8 million for the same period in 2022 and 110.9 million for the fourth
quarter in 2022.
The monthly average revenue per membership (ARM5) for the quarter was RMB14.35,
compared to RMB14.69 for the same period in 2022 and RMB14.17 for the fourth
quarter in 2022.

Footnotes:[1]
Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB6.8676 as of March 31, 2023, 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).
[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.

First Quarter 2023 Financial Results
Total revenues reached RMB8.3 billion (US$1.2 billion), increasing 15% year over year.
Membership services revenue was RMB5.5 billion (US$807.8 million), increasing 24%
year over year. The increase was primarily attributable to the strong growth in the numberof total subscribing members as we launched a series of premium content during the quarter.
The average daily number of total subscribing members increased from 101.4 million forthe first quarter in 2022 to 128.9 million for the first quarter in 2023. The number of total
subscribing members increased from 101.4 million as of March 31, 2022 to 120.3 million
as of March 31, 2023.
Online advertising services revenue was RMB1.4 billion (US$204.4 million), increasing
5% year over year. The increase was driven by the growth of performance-based
advertising business.
Content distribution revenue was RMB727.3 million (US$105.9 million), increasing 16%
year over year, primarily driven by the increase in average unit price of cash transactions,partially offset by the decrease in the number of barter transactions.
Other revenues were RMB670.5 million (US$97.6 million), decreasing 20% year over year,
primarily due to the adjustment in business operation model of certain business line andrelatively soft performance of online game business compared with the same period lastyear.
Cost of revenues was RMB6.0 billion (US$867.3 million), flat year over year. Content
costs as a component of cost of revenues were RMB4.2 billion (US$610.5 million),decreasing 5% year over year, primarily associated with the adjustment in business
operation model of certain business line.
Selling, general and administrative expenses were RMB1.1 billion (US$161.0 million),increasing 48% year over year, primarily due to higher marketing spending.
Research and development expenses were RMB428.3 million (US$62.4 million),decreasing 10% year over year, primarily due to the decrease of personnel-relatedcompensation expenses.
Operating income was RMB858.6 million (US$125.0 million), compared to operating
income of RMB93.4 million in the same period in 2022. Operating income margin was
10%, compared to operating income margin of 1% in the same period in 2022. Non-GAAP
operating income was RMB1.0 billion (US$150.6 million) and non-GAAP operating
income margin was 12%, compared to non-GAAP operating income of RMB326.6 million
and non-GAAP operating income margin of 4% in the same period in 2022.
Total other expense was RMB208.2 million (US$30.3 million), compared to total otherincome of RMB97.3 million during the same period of 2022. The year over year variance
was primarily due to the disposal gain derived from the deconsolidation of certain
subsidiaries due to change in control in the first quarter of 2022, increased interest expenses
and loss from equity method investment, partially offset by higher interest income and theforeign exchange gain due to the fluctuation of exchange rate between Renminbi and the
U.S. dollar.
Income before income taxes was RMB650.4 million (US$94.7 million), compared toincome before income taxes of RMB190.7 million in the same period in 2022.

Income tax expense was RMB24.6 million (US$3.6 million), compared to income tax
expense of RMB16.9 million in the same period in 2022.
Net income attributable to iQIYI was RMB618.1 million (US$90.0 million), compared to
net income attributable to iQIYI of RMB169.1 million in the same period in 2022. Diluted
net income attributable to iQIYI per ADS was RMB0.64 (US$0.09) for the first quarter of2023, compared to diluted net income attributable to iQIYI per ADS of RMB0.21 in thesame period of 2022. Non-GAAP net income attributable to iQIYI was RMB939.5 million(US$136.8 million), compared to non-GAAP net income attributable to iQIYI of
RMB162.2 million in the same period in 2022. Non-GAAP diluted net income attributable
to iQIYI per ADS was RMB0.97 (US$0.14), compared to non-GAAP diluted net income
attributable to iQIYI per ADS of RMB0.20 in the same period of 2022.
As of March 31, 2023, the Company had cash, cash equivalents, restricted cash, short-term
investments and long-term restricted cash included in prepayments and other assets of
RMB6.3 billion (US$922.3 million).
Conference Call Information
iQIYI’s management will hold an earnings conference call at 7:00 AM on May 16, 2023,
U.S. Eastern Time (7:00 PM on May 16, 2023, 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:
tfg7d8.html

https://s1.c-conf.com/diamondpass/10030369-

It will automatically direct you to the registration page of "iQIYI First Quarter 2023
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 dialin 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, 2023. Dial-in numbers for the replay are as follows:
International Dial-in:
Passcode:+1 855 883 1031
10030369

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. 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 daily subscriberbase of more than 100 million, and its diversified monetization model includes membershipservices, online advertising services, content distribution, online games, IP licensing, talentagency, 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 and impairment of intangible assets resulting frombusiness combinations.
Non-GAAP net income attributable to iQIYI, Inc. represents net income attributable to
iQIYI, Inc. excluding share-based compensation expenses, amortization and impairmentof intangible assets resulting from business combinations, disposal gain or loss, impairmentof 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, 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 shares, 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

Revenues:
Membership services
Online advertising services
Content distribution
OthersTotal revenues

March 31,2022
RMB
(Unaudited)

December 31,
2022
RMB(Unaudited)

March 31,2023
RMB
(Unaudited)

4,471,475
1,337,299
626,116
842,169
7,277,059

4,743,562
1,553,475
634,696
661,126
7,592,859

5,547,305
1,403,752
727,262
670,4888,348,807

Operating costs and expenses:
Cost of revenues
Selling, general and administrative
Research and development
Total operating costs and expenses
Operating income(5,963,853)(744,781)(475,012)(7,183,646)
93,413(5,402,243)(940,903)(466,157)(6,809,303)
783,556(5,956,003)(1,105,855)(428,318)(7,490,176)
858,631

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

8,947(175,515)(9,017)(3,158)276,076
97,333

26,292(176,018)
19,029(46,754)(313,054)(490,505)

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

Income before income taxes
Income tax (expense)/benefit

190,746(16,882)

293,051
11,587650,388(24,632)

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

173,864
4,771
169,093
169,093304,638379
304,259
304,259625,756
7,647
618,109618,109

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

0.03
0.03

0.05
0.05

0.09
0.09

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

0.21
0.21

0.35
0.35

0.66
0.64

5,706,290,530
5,742,801,024

6,084,021,514
6,099,971,176

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

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,
2022
RMB

March 31,2023
RMB
(Unaudited)

ASSETS
Current assets:
Cash and cash equivalents
Restricted cash
Short-term investments
Accounts receivable, net
Prepayments and other assets(1)Amounts due from related parties
Licensed copyrights, net
Total current assets

7,097,938
13,618818,265
2,402,675
2,602,927
104,154746,058
13,785,635

4,529,267
6,120
668,991
2,722,295
11,221,073
171,926
940,429
20,260,101

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

1,104,721
2,453,644
6,840,629
436,685
13,001,904
3,865,133
673,971
3,826,147
59,88032,262,714

1,035,514
2,224,545
6,701,062
413,238
12,604,535
4,217,029
654,667
3,826,147
95,88031,772,617

46,048,349

52,032,718

5,993,416
3,521,646
4,232,110
8,305,447
3,347,638
103,5172,626,244
28,130,018

5,721,544
2,949,896
4,727,981
8,264,709
3,262,497
99,8082,650,143
27,676,578

9,568,279
1,832
100,941
508,571
1,395,269
11,574,892

11,668,397
811
95,322
488,470
1,451,575
13,704,575

39,704,910

41,381,153

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

194
193
50,885,688(46,498,897)
1,863,454
92,807
6,343,439

236
193
54,473,865(45,880,788)
1,975,578
82,481
10,651,565

Total liabilities, redeemable noncontrolling interests and shareholders' equity

46,048,349

52,032,718

Total assets
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS ANDSHAREHOLDERS’ EQUITYCurrent 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
Shareholders’ equity:(1) This includes payment of US$1,197.6 million to the paying agent to meet the Company's repurchase obligation of
the 2.00% Convertible Senior Notes due 2025. The repurchase was completed in April 2023.

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

Three Months Ended
March 31,2022
RMB
(Unaudited)

December 31,
2022
RMB(Unaudited)

March 31,2023
RMB
(Unaudited)

Net cash (used for)/provided by operating activities
Net cash (used for)/provided by investing activities(1,167,049)(67,305)

578,899

166,845

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

2,046,550

2,861,582(3,356,630)(4,284)(8,576)(8,862)807,9124,285,302(2,196,882)

3,074,864

3,576,254

7,861,556

3,882,776

7,861,556

5,664,674

3,811,350
71,426-

7,097,938
13,618750,000

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

3,882,776

7,861,556

5,664,674

Net cash (used for)/provided by operating
activities
Less: Capital expenditures (2)(1,167,049)(51,315)

853,397(8,800)1,001,765(241)

Free cash flow

(1,218,364)

844,597

1,001,524(1,2)

Reconciliation of cash and cash equivalents andrestricted cash:
Cash and cash equivalents
Restricted cash
Long-term restricted cash
Total cash and cash equivalents and restricted cash
shown in the statements of cash flows

853,397

1,001,765(1) Net cash provided by or used for 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.

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
Mar 31,

Dec 31,March 31,

2022

2022

2023

RMB

RMB

RMB

Operating income

93,413

783,556

858,631

Add: Share-based compensation expenses

216,644

188,506

169,046

16,4986,619

Add: Amortization and impairment of intangible assets

(1)

6,619

Operating income (non-GAAP)

326,555

978,681

1,034,296

Net income attributable to iQIYI, Inc.

169,093304,259

618,109

Add: Share-based compensation expenses

216,644

188,506

169,046

Add: Amortization and impairment of intangible assets(1)16,498

6,619

6,619

Add: Disposal (gain)/loss(429,916)

62,199-Add: Impairment of long-term investments

118,984

182,277

271,873

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

(792)

8,001

9,445

Add: Reconciling items on equity method investments

10,914

17,621

18,351

Add: Tax effects on non-GAAP adjustments(2)(2,529)(2,704)(1,021)

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

162,189

856,374

939,533

Diluted net income per ADS

0.21

0.35

0.64

Add: Non-GAAP adjustments to earnings per ADS(0.01)

0.63

0.33

Diluted net income per ADS (non-GAAP)

0.20

0.98

0.97

(1)
(2)

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