iQIYI, Inc. Q4 FY2025 Earnings Call

Thank you for your patience, and welcome to the iQIYI Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. I will now turn the conference over to Ms. Chang Yu, the Investor Relations Director of the company. Please continue.

Thank you, operator. Hello, everyone, and thank you for joining iQIYI's Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. The company's results were released earlier today and are available on the company's Investor Relations website at ir.iqiyi.com. On the call today are Mr. Yu Gong, our Founder, Director and CEO; Ms. Ying Zeng, our Interim CFO; Mr. Xiaohui Wang, our Chief Content Officer; Mr. Youqiao Duan, Senior Vice President of our Membership Business; Mr. Xianghua Yang, Senior Vice President of International and Online Game Business; and Mr. Gang Wu, Senior Vice President of Brand Advertising Business. Mr. Gong will give a brief overview of the company's business operations and highlights, followed by Ms. Zeng, who will go through the financials. After the prepared remarks, the management team will participate in the Q&A session. Before we proceed, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC. iQIYI does not undertake any obligation to update any forward-looking statements, except as required under applicable law. I will now pass on to Mr. Gong. Please go ahead.

Hello, everyone, and thank you for joining us today. In 2025, we focused on strengthening our core business to renew growth while achieving advancements in emerging businesses. These efforts drove a solid year-end performance, with total revenue in Q4 returning to growth both annually and sequentially. Notably, our long-form dramas secured the top viewership market share according to Enlightent data's annual rankings, with 5 titles exceeding a popularity score of 10,000 on iQIYI. More importantly, we made remarkable breakthroughs in IP franchise development, moving beyond creating individual hit titles to building evergreen IPs that drive growth across diverse formats. Strange Tales of Tang Dynasty stands as a stellar example of a flagship IP with 4 consecutive blockbuster seasons, expanding its influence from long to short and micro dramas, as well as offline experiences. Our advertising businesses continue to demonstrate strong growth potential. Our overseas business has evolved into a sustainable and scalable second growth engine powered by accelerated organic momentum. In 2025, revenue from membership services increased by over 30% year-over-year, with growth accelerating to 40% in the second half of the year. The subscriber base reached an all-time high. At the same time, our experience business has entered a crucial stage of development. For IP-based consumer products, we built a dedicated in-house team and upgraded from a listening-only approach to a dual-track model, combining self-operated merchandise with licensing, thus enhancing our control over IP operations and amplifying monetization efficiency. On the offline experience front, we launched our first iQIYI LAND in Yangzhou on February 8, 2026, receiving a positive initial reception, with two additional parks scheduled to open later this year. 2026 marks a key step toward scaled development as we build the experience business into a new engine for long-term value creation. Now let's dive into the details of our business performance in Q4, starting with content, the cornerstone of our business. For long-form dramas, we secured the top viewership market share as driven by a robust slate of premium content and breakthroughs in serialized IPs that boost engagement and commercial results. Strange Tales of Tang Dynasty 3: To Changan marked our first title with 2 seasons exceeding a popularity score of 10,000. Among 2025 new releases, it ranked first in ad revenue and second in membership revenue. Following this momentum, the crime drama, The Punishment 2, became the first title of 2026 to surpass 10,000 for the popularity score and is our second franchise with 2 seasons reaching this milestone. Shifting to movies, we maintained a diverse lineup with broad demographic appeal. For iQIYI originals, the summer's theatrical hit, The Shadow's Edge Bufeng Zhui Ying, extended its offline success to online demand. It not only topped all Q4 film releases by peak iQIYI Popularity Index score but also became the highest-rated domestic action crime film of the past decade on Douban. Additionally, our original online film, The Sixth Robber Yun Chao Da Jie An, set a new all-time high for the popularity score within its category. For movies broadcasted on our platform, we retained the top viewership market share for 16 consecutive quarters. In Q4, we rolled out diverse titles, including The Warm Seat, That Two Lives, The Animated Feature, Nobody, Lang Lang Shan Xiao Yao Guai, The Adventure, and the female-oriented feature Flew Away. Furthermore, our innovative revenue-sharing model designed to optimize returns for films with limited theatrical box office performance gained further traction. The Return of the Lame Hero generated RMB 36 million in shared revenue, ranking first among all titles under this model. Turning to variety shows, our dual focus on long-running franchises and fresh innovative IPs showed market-leading performance in 2025. According to Enlightent data, three of our multi-season titles ranked in the top 10 most-watched multi-season variety shows, and two new releases ranked in the top 3 most-watched new shows. Our originals continue to set benchmarks. The Rap of China ranked its ninth season this year, cementing its position as China's longest-running online variety IP. Additionally, Hi! Young Farmers 3, a spin-off of the beloved Become a Farmer franchise featuring the boy group, reached an all-time high in its popularity score this season. Among brand-new originals, Wander Together exceeded a popularity score of 8,300. We also expanded IP values through merchandise partnerships with brands for Hi! Young Farmers 3, The Blooming Journey 2, Yilu Fanhua, and Wander Together, unlocking new revenue potential. Turning to micro dramas, we have expanded free content to over 70% of our 20,000 title library to broaden engagement. Our original portfolio is scaling to over 150 titles today, fueling record-high membership and distribution revenues in Q4 from these offerings. Spin-offs from Strange Tales of Tang Dynasty, The Chinese Detective and The Light On library both hit new highs for popularity score. Notably, over 70% of their debut viewers also watched the long-form serials, helping to extend the IP's lifespan. These releases not only boosted membership views but also attracted top-tier brand partnerships, moving well beyond the conventional performance ad model. Building on the momentum of the premium micro dramas, we are working into micro animations and a business model centered on free content, with a pipeline of over 10,000 titles in place, and micro animation viewership and time spent are growing rapidly. Beyond content, we further amplified our IP value from flagship marketing events. In December 2025, we hosted the annual iQIYI Scream Night alongside a 2-day iQIYI Scream Carnival in Macau to honor the year's standout productions and talents. The event drew over 200 million on-site attendees and live stream viewers, bringing together around 300 celebrities and industry partners. Next, let's dive into our 2026 content strategy and the exciting Q1 lineup. Starting with dramas, our Q1 slate includes titles such as Love Between Lines, Da Xi, Swords into Plowshares, Tai Ping Nian, Born to Be Alive, Sheng Ming Shu, How Dare You, Cheng He Ti Tong, The Devil Between Us, Chu E, Our Dazzling Days, Sui Yue You Qing Shi, Pursuit of Jade, Zhu Yu, and Love After You Yang, Zhong Qi Chu Nai. For movies, we will meet audience demand with a diverse slate spanning top theatrical releases and online movies. The Q1 lineup features original online movies such as Northeastern Brother Season 3, Dong Bei Yong Ge, and The Sing City, alongside licensed titles. For variety shows, we are enhancing the long-term operation of multi-season IPs while exploring fresh and innovative new IPs. Key Q1 releases include Five Hearts Season 6, Wu Xi; Hit Song Season 2, You Ge; as well as new IPs such as Wonders Gather and Tonight Comedy Show. For micro dramas, we will focus on creating original content with quality and innovation while enhancing operations, commercialization, and deepening integration of AI. Key Q1 titles include Return to a Better Tomorrow, Xin Yingxiong Bense; The Address of a False Noble Woman and The Amber Hour. For animations, we will significantly expand our lineup of original Chinese animation compared to previous years. In Q1, our slate features original long-running series such as The Great Ruler, Da Zhuzai, and Against the Gods, as well as popular IP such as How Dare You Season 2 and Ways of Crisis. For children's content, we will secure top-tier SSIPs, scale original production, and expand our AI-driven portfolio. Key offerings in Q1 include a brand-new original title, Detective Baboo, alongside licensed shows such as PAW Patrol Season 11 and the latest season of Pleasant Goat and Big Big Wolf. Moving on to membership services, our membership services revenue has shown consistent year-over-year recovery driven by diverse premium offerings. In Q4, members enjoyed popular titles such as Strange Tales of Tang Dynasty 3: To Changan, Silent Honor, Fated Hearts, Legend of the Magnate, and Sword and Beloved. We revitalized our membership business through various operational initiatives. For example, we boosted new subscriptions and upgrades to the S-Diamond plan by offering inclusive products such as the free Express package, which provided early access to families at no extra cost. In 2025, the Express package was available for over 40 dramas. Additionally, we are strengthening member retention by emphasizing annual memberships during holiday promotions, e-commerce festivals, and bundled partnership offers. To further increase the value of memberships, we introduced additional exclusive benefits, including five VIP events in the first quarter featuring participation in offline show recordings, advanced screenings, and the exciting iQIYI Scream Night. The iQIYI Scream Night event was particularly praised for exclusive perks like red carpet viewing and a live feed featuring their favorite celebrities. Moving on to the advertising business, in Q4, brand advertising revenue grew both annually and sequentially, with ad revenues from variety shows and our dramas both delivering double-digit annual growth, while core ad verticals such as food and beverage, internet services, e-commerce, and telecom services all recorded double-digit annual growth. Beyond long-form videos, our micro dramas and micro variety shows are gaining significant attention from brand advertisers. For micro dramas, we successfully engaged several renowned brands in 2025 through tailored content bundled sales that integrate product placements with theater branding and a series of collaborations. Likewise, our micro variety shows have received strong market recognition, fostering long-term partnerships with multiple clients and driving impressive revenue growth. For commercial ads, we regained sequential revenue growth in Q4, driven by a healthier and more balanced advertiser portfolio. Revenue from small and mid-sized advertisers grew both annually and sequentially, with internet services, e-commerce, and financial services leading the growth. Additionally, we deployed a proprietary large AI model for scaled ad delivery, leveraging deep thematic understanding that has boosted commercial rates. Moving on to technology, we introduced Nado Pro, our proprietary AI agent platform designed to revolutionize professional content creation by integrating leading global large models with our deep expertise in professional content production. Nado Pro effectively streamlines the production pipeline from script evaluation to final generation. Currently in its close beta phase, Nado Pro is empowering our internal teams and select partners in diverse professional content such as feature films, dramas, and animation. Additionally, Taodou World, our pioneering AI agent-based NPC platform, continues to redefine entertainment experiences. Users can now engage with over 1,700 NPC agents from our popular titles through song, dialogue, fan fiction, and virtual social interaction, creating powerful synergies with key content and delivering immersive emotional connections with fans to extend the long-term value of our IP. Strong user adoption is translating into commercial success, and revenue from Total War has increased sharply year-over-year in 2025. In addition to pushing the boundaries of AI applications, we are leading the industry with cutting-edge virtual production technology. Our in-house developed IQ Stage system has meaningfully enhanced the efficiency of vehicle scene shots for the theatrical hit Pegasus 3, delivering unparalleled results with zero frame drops and zero aliasing, representing the highest standard for virtual production in car scenes in China. Innovation is at the core of everything we do at iQIYI, with a portfolio of over 12,000 patent applications. We are proud to rank 72 among the top 100 Chinese enterprises for valid invention patents. In 2025 alone, we filed nearly 1,000 new patent applications, most of which drive achievements in AI across content development, production, broadcasting, and offline experiences. Moving on to the business performance in regions outside of Mainland China, we continued to deliver robust growth in Q4 with membership revenue increasing by 40% annually. Markets such as Brazil, Mexico, and Indonesia showed exceptional performance, with membership revenue surging by over 80% annually. Our strong performance is driven by the growing popularity of our C-dramas, which have shown substantial annual revenue growth. Notably, Speed and Love was a standout hit in 2025, emerging as the best-performing C-drama during the peak viewing period and topping popularity charts in 14 markets on our international platform. Its success extended further with the spin-off variety show becoming one of the most popular Chinese variety shows on our overseas platform this year. We are also ramping up production of local original content with strong user reception. The original Oops! I'm in Jail was the top Taiwanese drama on our platform in 2025. Moreover, our Thai original variety show Running Man Thailand, launched in February 2026, has secured exceptional brand advertising partnerships. Apart from long-form content, micro dramas captivated increased engagement among overseas audiences in Q4. Membership revenue from micro dramas hit a new high, driven by originals such as Spring in the Palace and Wild Scene and licensed hits from China like Midsummer's Vendela. Our efforts in creating local original micro dramas have also started to show results, with five titles premiered in December 2025, featuring local content for South Korea, Thailand, the U.K., and Indonesia. Among these, the Korean micro drama, Darling, Is It All Coincidence, and the Thai micro drama, Catch Me If You Love Me, have outperformed, gaining notable popularity across and beyond our platform. In addition to content in Q4, we held four major offline marketing events in Thailand, Indonesia, Malaysia, and Singapore featuring Chinese celebrities. These events amplified the influence of our content and the commercial value of our platform, forged stronger partnerships, and propelled the global reach of Chinese content. Moving on to the experience business, while we are focusing on two core areas, IP-based consumer products and iQIYI LAND, we aim to build a new engine for sustainable long-term growth by leveraging our extensive IP assets. Our self-operated merchandise demonstrated solid progress, highlighted by top-selling collectible cards from premium dramas like The Journey of Legend. For IP licensing, Strange Tales of Tang Dynasty 3: To Changan secured strong partnerships across food and beverage, beauty, and outdoors, and Sword and Beloved set new sales records during its broadcast period. Looking ahead to 2026, we plan to grow our IP licensing business and expand our self-operated merchandise beyond collectible cards to more categories. For iQIYI LAND, we adopt a light asset model by combining AI and XR technology with IPs to create immersive experiences that are more efficient, flexible, and require less space and investment than traditional theme parks. Our first iQIYI LAND successfully opened in Ganzhou on February 8. Our Kaifeng and Beijing locations are set to open later this year, each incorporating unique local elements to deliver tailored experiences. Revenue will primarily come from ticket sales and on-site spending. Looking ahead, we aim to position iQIYI LAND as a key sales channel for IP-based consumer products and as a vital platform for maximizing the long-term value of our IP portfolio. In summary, in 2026, we will focus on three key strategic goals. First, we will strengthen our domestic core by enhancing the quality of original content, membership, and advertising businesses. Second, we will aim to sustain strong growth in our overseas and experience businesses, building more robust engines for long-term expansion. Third, we believe that rapid advancements in AI large models will revolutionize the content production industry within the next few years, significantly cutting production costs, lowering barriers to professional content creation, and boosting both quantity and quality of content. This exciting change will greatly benefit media platforms, especially us. To seize this opportunity, we are dedicated to building a dynamic AIGC ecosystem and transitioning our platform from a centralized to a decentralized model. We look forward to sharing detailed initiatives at our upcoming iQIYI World Conference in April. Now let me hand it over to Ying Zeng for the financials.

Thanks, Mr. Gong, and hello, everyone. Let me walk you through the key numbers for Q4. Total revenues for Q4 were RMB 6.8 billion, up 2% sequentially. Membership services revenue reached RMB 4.1 billion, down 3% sequentially due to seasonality. Online advertising revenue was RMB 1.4 billion, up 9% sequentially, primarily driven by the streaming content and e-commerce Double 11 campaign. Content distribution revenue reached RMB 787.7 million, up 22% sequentially, primarily driven by the increase in cash transactions. Other revenues were RMB 547.9 million, down 6% sequentially. Moving on to cost and expenses. Content cost was RMB 3.8 billion, down 5% sequentially as we adopt a more curated content acquisition strategy centered on quality. Total operating expenses were RMB 1.4 billion, up 2% sequentially. Turning to profit and cash balance. Non-GAAP operating income was RMB 143.5 million. Non-GAAP operating income margin was 2%. As of the end of Q4, we had cash, cash equivalents, restricted cash, short-term investments, and long-term restricted cash included in prepayments and other assets at a total of RMB 4.7 billion. At quarter end, the company had a loan of USD 636.6 million to PAG recorded under the line item of prepayments and other assets. For detailed financial data, please refer to our press release on our IR website. Now I will open the floor for Q&A.

Your first question comes from Xueqing Zhang with CICC.

With recent upgrades in AI video generation models like Seedance, which are approaching production level quality, could management share your view on how these advancements may impact iQIYI's business, particularly in content production and cost structure? What is your plan for leveraging AI video generation models?

With recent upgrades in AI video generation models like Seedance, which are approaching production level quality, could management share your view on how these advancements may impact iQIYI's business, particularly in content production and cost structure? What's your plan on leveraging AI video generation models?

Our CEO, Mr. Gong, is taking this question. Video generation models will substantially reduce the cost of producing long-form videos, shorten production time, and lower the barrier to creation. This potentially will attract more new creators to this business and ultimately lead to more creations for long-form video production. This is very much beneficial to long-form video platforms like iQIYI, which means this will lead to an increase in both the quantity and quality of long-form video content.

Video generation models will significantly lower the costs associated with producing long-form videos, decrease production time, and simplify the creation process. This could draw in more new creators to the industry, resulting in an increased volume of long-form video productions. This development is particularly advantageous for long-form video platforms like iQIYI, as it is expected to enhance both the quantity and quality of long-form video content.

Let me just discuss the impact of AI generation content for each content genre. For example, micro animation is actually AI-native content created entirely by AI. And for children's animation and also micro dramas, it has been demonstrated that large models can produce this content, reducing the production costs to 1/10 or less compared to traditional methods. For online films, animation, and documentaries, etc., these are rapidly permitted by AI-led production approaches as well. Among all these long-form video content, the most difficult ones to produce are the live-action content, for example, the theatrical films, drama series, and variety shows. In fact, this content has, in part, adopted AI in their production process, and the results have proven that these have significantly reduced the content production cost. Based on our projections and estimations, we believe the AI-led commercial film will probably emerge within the next 2 to 3 years.

Among all the long-form video content, the most challenging to produce are the live-action projects, such as theatrical films, drama series, and variety shows. This type of content has begun to incorporate AI into its production process, leading to a notable decrease in production costs. According to our forecasts, we anticipate that AI-driven commercial films may become prevalent in the next 2 to 3 years.

For iQIYI, we are placing our focus on 2 areas to embrace these AI initiatives. On one hand, we have developed Nado Pro, an industry-specific AI agent for video content production. On the other hand, we are working to build a new AIGC content ecosystem through various operational methods. Hopefully, we can attract more creative talent in this new AI era.

Your next question comes from Maggie Ye with CLSA.

Can management provide more detail on the company's content strategy for 2026? Specifically, what are the key priorities for different genres such as drama, variety shows, film, and micro dramas? Additionally, how is the balance between self-produced content and licensed content being approached?

Thank you, Maggie. We will invite our Chief Content Officer, Mr. Xiaohui Wang, to take this question.

Can management walk us through the company's content strategy for 2026 in more detail? For example, how are we thinking about the key priorities across different genres, including drama, variety shows, film, and micro dramas, etc.? And how are you thinking about the mix of self-produced content versus licensed one? Thank you, Maggie. We will invite our Chief Content Officer, Mr. Xiaohui Wang, to take this question.

Given the current volume of in-production dramas, we will slightly reduce the number of dramas to be produced in 2026 and place greater emphasis on top-tier titles in terms of their quality.

Thank you, Maggie. We will invite our Chief Content Officer, Mr. Xiaohui Wang, to take this question. Given the current volume of in-production dramas, we will slightly reduce the number of dramas to be produced in 2026 and place greater emphasis on top-tier titles in terms of their quality.

In terms of the realistic, suspense, and crime genres, these content categories have been iQIYI's strengths. In these areas, we'll continue to maintain our innovation to create new content and more creative content, and maintain our advantage in these areas.

In terms of the realistic, suspense, and crime genres, these content categories have been iQIYI's strengths. In these areas, we'll continue to maintain our innovation to create new content and more creative content, and maintain our advantage in these areas.

Starting in 2025, we have increased the supply of female-oriented content. For example, starting from the end of 2025, we began to roll out a new variety show called Winter Together. This targets the new female users, and at the beginning of 2026, we launched a young female-oriented drama called How Dare You.

We have maintained our innovation to create new and more creative content, keeping our advantage in these areas. Starting in 2025, we have increased the supply of female-oriented content. For example, towards the end of 2025, we began rolling out a new variety show called Winter Together, which targets new female users. At the beginning of 2026, we launched a young female-oriented drama called How Dare You.

For young male users, we have released multiple original animations this year, including the long-running series The Great Ruler, How Dare You Season 2, and A Way of Choices.

Starting from the end of 2025, we began to roll out a new variety show called Winter Together, aimed at attracting new female users. At the beginning of 2026, we launched a young female-oriented drama titled How Dare You. For young male users, we have released several original animations this year, including the long-running series The Great Ruler, How Dare You Season 2, and A Way of Choices.

With the support of new regulatory policies, we will step up the exploration of innovative content, for example, the short-form drama series.

For young male users, we have released multiple original animations this year, including the long-running series The Great Ruler, How Dare You Season 2, and A Way of Choices. With the support of new regulatory policies, we will step up the exploration of innovative content, for example, the short-form drama series.

We recently introduced a unified revenue-sharing policy across 8 major content categories, including dramas and films. Under this new framework, production partners' returns will be more directly linked to each title's revenue contribution and allow outstanding work to earn higher returns.

We recently introduced a unified revenue-sharing policy across 8 major content categories, including dramas and films. Under this new framework, production partners' returns will be more directly linked to each title's revenue contribution and allow outstanding work to earn higher returns.

Apart from the content category, for example, theatrical films and drama series, as Mr. Gong mentioned earlier, we are gradually adopting and proactively implementing AI-led production for categories such as micro animation, animation, and micro dramas while applying AI across other content categories to reduce costs and accelerate timelines.

Your next question comes from Lincoln Kong with Goldman Sachs.

My question is about the overseas business. What are our plans and strategy for 2026?

Thank you, Lincoln. We'll invite our Senior Vice President of International Business, Mr. Xianghua Yang, to take this question. Please go ahead.

Thank you, Lincoln. We'll invite our Senior Vice President of International Business, Mr. Xianghua Yang, to take this question. Please go ahead.

In 2025, membership revenue grew by over 30%, with the annual growth rate actually accelerating to 40% in the second half of the year. 2025 marked our highest growth rate since the overseas business entered a stable operating phase.

Thank you, Lincoln. We'll invite our Senior Vice President of International Business, Mr. Xianghua Yang, to take this question. Please go ahead. In 2025, membership revenue grew by over 30%, with the annual growth rate actually accelerating to 40% in the second half of the year. 2025 marked our highest growth rate since the overseas business entered a stable operating phase.

For 2026, our strategy is to sustain a high revenue growth rate or even accelerate our growth rate.

In 2025, membership revenue grew by over 30%, with the annual growth rate actually accelerating to 40% in the second half of the year. 2025 marked our highest growth rate since the overseas business entered a stable operating phase. For 2026, our strategy is to sustain a high revenue growth rate or even accelerate our growth rate.

In terms of the content strategy, our market-tailored content mixes have proven effective and continue to attract users. C-dramas continue to expand their influence overseas and will remain at the core of our overseas content portfolio, especially genres with strong cross-over appeal such as ancient costume, romance, and contemporary romance.

Our market-tailored content mixes have proven effective and continue to attract users. C-dramas are expanding their influence overseas and will remain at the core of our international content portfolio, particularly in genres with strong cross-over appeal such as ancient costume, romance, and contemporary romance.

I am sorry, one more thing. Yes, go ahead.

Chang Yu, IR Director, expressed regret and invited further comments.

For content, we are ramping up original production and local content licensing in Thailand, Malaysia, and Indonesia. In terms of operations, AI-powered translation and dubbing have significantly improved efficiency, reduced costs, and accelerated the content release schedule. Going forward, we will fully leverage social media channels and use AI to generate promotional efforts, enabling low-cost, high-efficiency content distribution and user reach. Meanwhile, we will continue online and offline advertising to further amplify the influence of C-drama. Lastly, we will continue to promote content and strengthen our brand presence in international markets through initiatives such as celebrity sign-ups and offline events.

Your next question comes from Rebecca Xu with Morgan Stanley.

My question is about iQIYI LAND. Could management share the operating performance of iQIYI LAND in Yangzhou since its opening? Also, can you please share the 2026 plan for this business?

Thank you, Rebecca. I will invite our CEO, Mr. Gong, to take this question.

Thank you, Rebecca. I will invite our CEO, Mr. Gong, to take this question.

Our very first iQIYI LAND opened in Yangzhou on February 8 and offers 7 core immersive experiences, including stage performances, multisensory theaters, and interactive light and shadow spaces.

Thank you, Rebecca. I will invite our CEO, Mr. Gong, to take this question. Our very first iQIYI LAND opened in Yangzhou on February 8 and offers 7 core immersive experiences, including stage performances, multisensory theaters, and interactive light and shadow spaces.

The first iQIYI LAND opened about 20 days ago, and during which we also experienced the Chinese New Year holidays. The performance and feedback are meeting expectations, which can be reflected in the ratings on major OTA platforms, with average points at 4.8 out of 5. Recently, the latest rating reached 4.9 on certain platforms.

The first iQIYI LAND opened about 20 days ago, coinciding with the Chinese New Year holidays. The performance and feedback are meeting expectations, as shown by the ratings on major OTA platforms, which average 4.8 out of 5. Recently, the latest rating even reached 4.9 on some platforms.

From the opening until now, the visitor numbers have continued to grow. Based on actual operations, we have observed that this experience offers fun for all ages, with participants ranging from children as young as 4 to 5 years old to seniors in their 60s and 70s.

From the opening until now, the visitor numbers have continued to grow. Based on actual operations, we have observed that this experience offers fun for all ages, with participants ranging from children as young as 4 to 5 years old to seniors in their 60s and 70s.

We are looking at the potential for a 1 to 2x increase in peak single-day revenue during the following peak period. The Yangzhou location has its special areas, and the spring season, especially March and April, is a peak travel season for Yangzhou. The upcoming Labor holiday in May, summer months of July and August, and National Day holiday in October could potentially boost revenue performance compared to the first 20 days.

We are looking at the potential for a 1 to 2x increase in peak single-day revenue during the following peak period. The Yangzhou location has its special areas, and the spring season, especially March and April, is a peak travel season for Yangzhou. The upcoming Labor holiday in May, summer months of July and August, and National Day holiday in October could potentially boost revenue performance compared to the first 20 days.

The expected growth will likely come from two major areas: deeper operations and more refined management for the entire iQIYI LAND and increased efficiency for iQIYI LAND.

The expected growth will likely come from two major areas: deeper operations and more refined management for the entire iQIYI LAND and increased efficiency for iQIYI LAND.

Currently, the average transaction value for consumer products at iQIYI LAND is about RMB 100. We believe there's potential for growth in the future. We will try to load more products in the future and also extend to other content categories as we improve our consumer product team operations.

Growth will likely come from two major areas: deeper operations and more refined management for the entire iQIYI LAND, as well as increased efficiency for iQIYI LAND. Currently, the average transaction value for consumer products at iQIYI LAND is about RMB 100. We believe there's potential for growth in the future. We will try to load more products in the future and also extend to other content categories as we improve our consumer product team operations.

For this year, we will focus more on self-operated IP consumer products, and the operations will be strengthened this year, leading to a revenue potential growth of 100%.

Your next question comes from Guangfa.

We believe there's potential for growth in the future. We will try to load more products in the future and also extend to other content categories as we improve our consumer product team operations. For this year, we will focus more on self-operated IP consumer products, and the operations will be strengthened this year, leading to a revenue potential growth of 100%. Your next question comes from indiscernible with Guangfa.

We'll invite our international business leader to take this question.

We will focus more on self-operated IP consumer products this year, and the operations will be strengthened, leading to a revenue potential growth of 100%. We'll invite our international business leader to take this question.

In terms of our content, our brand or our slogan is beloved Asian content. We focus not only on Chinese content, but also Asian content as well. Of course, Chinese content, which we call C-drama, is our foundation because all the content has already been produced for our domestic business. We only have to incur some of the dubbing and translation costs, which with AI is much more efficient and controllable. In addition to C-drama and Chinese content, we also have, for example, Japanese animation and also Korean dramas, including local content for the Thai region, Malaysia, and Indonesia. This is how we set ourselves apart from many Western players in the overseas market. For example, Netflix and other platforms host a lot of Western content, while we are the home of beloved Asian content.

We need to manage some of the costs for dubbing and translation, which is now much more efficient and controllable with AI. In addition to Chinese dramas and content, we also offer Japanese animation and Korean dramas, as well as local content for regions like Thailand, Malaysia, and Indonesia. This is how we differentiate ourselves from many Western companies in the international market. For instance, Netflix and other platforms focus heavily on Western content, while we prioritize beloved Asian content.

Also, I want to quickly add that micro dramas, which we rolled out at the end of last year, have become a significant contributor to our overseas platform's content viewing time, ranking as our #2 content category and growing quickly. Recently, during the Chinese New Year, we reached a new viewing high. This is something that sets us apart from Western players in the overseas market.

Micro dramas, which we rolled out at the end of last year, have become a significant contributor to our overseas platform's content viewing time, ranking as our #2 content category and growing quickly. Recently, during the Chinese New Year, we reached a new viewing high. This is something that sets us apart from Western players in the overseas market.

In terms of your question regarding ARPU and membership performance, it's actually different for each region. Overall speaking, we think we're at the mid-range of the price tier. For each different region, we expect a different price point. In more developed areas with spending powers similar to the West, ARPU is a bit higher than the domestic average. However, for developing regions, such as Southeast Asia, the average ARPU is a bit lower than the domestic average. But overall speaking, we would say that the overseas ARPU will be greater than or comparable to the domestic ARPU.

Overall, we believe we are in the mid-range of the price tier. Each region will have its own price point. In more developed areas with spending power similar to the West, the average revenue per user is slightly higher than the domestic average. However, in developing regions like Southeast Asia, the average revenue per user is somewhat lower than the domestic average. Overall, we expect that the overseas average revenue per user will be greater than or similar to the domestic average.

In terms of membership retention, for our overseas business, we adopt a premium model, which is a free-plus-paid content model. In more developed regions, this is very much similar to their spending and viewing habits, and retention is better than in domestic areas. However, in some developing regions, retention performance is a bit lower. Overall speaking, the membership retention is similar to domestic levels.

In terms of membership retention for our overseas business, we adopt a premium model, which is a free-plus-paid content model. In more developed regions, this aligns closely with their spending and viewing habits, leading to better retention than in domestic areas. However, in some developing regions, retention performance is somewhat lower. Overall, the membership retention is comparable to domestic levels.

In terms of the financial aspect, overall speaking, the free cash flow is now positive. In terms of P&L performance for operating income, we still have some financial accounting treatment to sort out. We haven't disclosed the exact numbers yet, but we will share more insights as we have more clarity.

There are no further questions at this time. I'll now hand back to management for closing remarks.

Thank you, everyone, for joining the call today. If you have any further questions, please do not hesitate to contact us. Thank you.

Thank you. Bye-bye.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.