iQIYI, Inc. Q1 FY2025 earnings call

• Long-form videos maintained leadership in core drama category, with suspense drama 'Drifting Away' surpassing 10,000 popularity score and generating significant revenue. Roman general and female-focused dramas made progress. - Micro dramas have over 15,000 titles, with daily viewing time and unique users surging. Focus on expanding micro drama portfolio, enhancing monetization opportunities. - Launched AI-powered features to improve user experience in long-form videos, allowing users to switch between highlights easily. - Membership services focused on expanding subscriber base with different membership plans, including family-oriented and ad-supported plans. - Advertising business saw content-driven ads contribute over half of revenue, with potential rebound driven by premium content. - Overseas business experienced strong growth in revenues and subscriber numbers, with focus on optimizing content mix for different regions.

Long-form videos maintained leadership in the core drama category with total viewership market share during the quarter. Membership services revenue reached RMB4.4 billion in the first quarter, up 7% sequentially. Advertising revenue decreased sequentially to RMB1.3 billion. Macro dramas have over 15,000 micro drama titles, with daily viewing time and unique users increasing by over 300% and 110% respectively from April to December. Overseas business saw revenues increasing by over 30% year-over-year in the first quarter.

Continue to invest in content ecosystem and user experience. Optimize capital structure, with reduction in net interest expense. Focus on expanding micro drama portfolio, enhancing monetization, and continuing to develop overseas business.

Market is increasingly unpredictable, which may cause actual results to differ from expectations. Investments in strategic areas may lead to short-term costs.

Q: Please elaborate on the latest developments of micro dramas and key focus points for future development?

A: Users have developed habit of watching micro dramas on iQIYI. Have over 15,000 micro drama titles with free and member-exclusive content. Mobile apps have distinct positioning. Future focus on more high-quality micro dramas and user acquisition.

Q: Share color about change of long-form video content strategy and rationale?

A: Future strategy focuses on releasing high-quality shorter episode premium dramas and more high-quality short dramas (5-20 minutes per episode) to increase content diversity and reduce risk.

Q: Details on overseas business in terms of revenue, profit contribution and future expectations?

A: Overseas business saw rapid growth in recent years, revenue growth, content mix optimized for regions. Revenue contribution from overseas is low currently but will invest to drive future growth, and overseas business was profitable in past couple of years.