6-K
iQIYI, Inc. (IQ)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OFFOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2024
Commission File Number: 001-38431
iQIYI, Inc.
4/F, iQIYIYouth Center Yoolee Plaza,
No. 21, North Road of Workers’ Stadium, Chaoyang District Beijing, 100027,
People’s Republic of China
Tel: +86 10 6267-7171
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Exhibit Index
| Exhibit 99.1 — Press Release — iQIYI Announces Third Quarter 2024 Financial Results |
|---|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| iQIYI, Inc. | ||
|---|---|---|
| By | : | /s/ Jun Wang |
| Name | : | Jun Wang |
| Title | : | Chief Financial Officer |
Date: November 21, 2024
EX-99.1
Exhibit 99.1
iQIYI Announces Third Quarter 2024 Financial Results
BEIJING, CHINA, November 21, 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 third quarter ended September 30, 2024.
ThirdQuarter 2024 Highlights
| • | Total revenues were RMB7.2 billion (US$1.0 billion^1^),<br>decreasing 10% year over year. |
|---|---|
| • | Operating income was RMB238.9 million (US$34.0 million) and operating income margin was 3%, compared to<br>operating income of RMB746.7 million and operating income margin of 9% in the same period in 2023. |
| --- | --- |
| • | Non-GAAP operating income^2^ was RMB368.6 million<br>(US$52.5 million) and non-GAAP operating income margin was 5%, compared to non-GAAP operating income of RMB894.9 million and<br>non-GAAP operating income margin of 11% in the same period in 2023. |
| --- | --- |
| • | Net income attributable to iQIYI was RMB229.4 million (US$32.7 million), compared to net income<br>attributable to iQIYI of RMB475.9 million in the same period in 2023. |
| --- | --- |
| • | Non-GAAP net income attributable to iQIYI^2^ was<br>RMB479.8 million (US$68.4 million), compared to non-GAAP net income attributable to iQIYI of RMB622.1 million in the same period in 2023. |
| --- | --- |
“In the third quarter of 2024, we topped the industry in the drama series market share, according to Enlightent data,” commented Mr. Yu Gong, Founder, Director, and Chief Executive Officer of iQIYI. “We have recently elevated our entertainment offerings and services with strategic enhancements, integrating sought-after mini and short dramas to complement our extensive long-form content portfolio. We have also introduced a family account option within our membership programs. We believe these improvements will better serve users’ evolving entertainment needs.”
“Our goal is to enhance content appeal by optimizing long-form video offerings and incorporating mini and short dramas into our content portfolio. With disciplined execution, we believe that such initiatives will lead to long-term value creation for our businesses.” commented Mr. Jun Wang, Chief Financial Officer of iQIYI.
Third Quarter 2024 Financial Highlights
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| (Amounts in thousands of Renminbi (“RMB”), except for per ADS data, unaudited) | September 30, | June 30, | September 30, | |||
| 2023 | 2024 | 2024 | ||||
| RMB | RMB | RMB | ||||
| Total revenues | 8,015,079 | 7,438,785 | 7,245,681 | |||
| Operating income | 746,747 | 342,093 | 238,921 | |||
| Operating income (non-GAAP) | 894,879 | 501,417 | 368,644 | |||
| Net income attributable to iQIYI, Inc. | 475,920 | 68,685 | 229,412 | |||
| Net income attributable to iQIYI, Inc.(non-GAAP) | 622,071 | 246,914 | 479,787 | |||
| Diluted net income per ADS | 0.49 | 0.07 | 0.24 | |||
| Diluted net income per ADS (non-GAAP)^2^ | 0.64 | 0.25 | 0.50 |
Footnotes:
| [1] | Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB7.0176 as of September 30,<br>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 convenience of the reader. |
|---|---|
| [2] | Non-GAAP measures are defined in the<br>Non-GAAP Financial Measures section (see also “Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures” for more details).<br> |
| --- | --- |
Third Quarter 2024 Financial Results
Total revenues reached RMB7.2 billion (US$1.0 billion), decreasing 10% year over year.
Membership services revenue was RMB4.4 billion (US$622.1 million), decreasing 13% year over year, primarily due to a lighter content slate.
Online advertising services revenue was RMB1.3 billion (US$190.5 million), decreasing 20% year over year, primarily due to the decrease in brand advertising business, partially offset by the growth of performance-based advertising business.
Content distribution revenue was RMB814.0 million (US$116.0 million), increasing 52% year over year, primarily driven by the increase in the barter transactions.
Other revenues were RMB728.8 million (US$103.8 million), decreasing 8% year over year.
Cost of revenues was RMB5.6 billion (US$805.1 million), decreasing 3% year over year. Content costs as a component of cost of revenues were RMB4.0 billion (US$569.0 million), decreasing 5% year over year. The decrease in content cost was primarily due to lighter movie offerings in the quarter.
Selling, general and administrative expenses were RMB907.9 million (US$129.4 million), decreasing 7% year over year. The decrease was primarily due to the decrease in the marketing spending.
Research and development expenses were RMB449.0 million (US$64.0 million), flat year over year.
Operating income was RMB238.9 million (US$34.0 million), decreasing 68% year over year. Operating income margin was 3%, compared to operating income margin of 9% in the same period in 2023. Non-GAAP operating income was RMB368.6 million (US$52.5 million), decreasing 59% year over year. Non-GAAP operating income margin was 5%, compared to non-GAAP operating income margin of 11% in the same period in 2023.
Total other income was RMB8.4 million (US$1.2 million), compared to total other expense of RMB254.2 million in the same period in 2023. The year over year variance was primarily driven by gain from foreign exchange, partially offset by the increase in impairment provision.
Income before income taxes was RMB247.3 million (US$35.2 million), compared to income before income taxes of RMB492.5 million in the same period in 2023.
Income tax expense was RMB11.5 million (US$1.6 million), compared to income tax expense of RMB9.0 million in the same period in 2023.
Net income attributable to iQIYI was RMB229.4 million (US$32.7 million), decreasing 52% year over year. Diluted net income attributable to iQIYI per ADS was RMB0.24 (US$0.03) for the third quarter of 2024, compared to diluted net income attributable to iQIYI per ADS of RMB0.49 in the same period of 2023. Non-GAAP net income attributable to iQIYI was RMB479.8 million (US$68.4 million), decreasing 23% year over year. Non-GAAP diluted net income attributable to iQIYI per ADS was RMB0.50 (US$0.07), compared to non-GAAP diluted net income attributable to iQIYI per ADS of RMB0.64 in the same period of 2023.
Operating cash flow was RMB242.5 million (US$34.6 million), compared to operating cash flow of RMB830.7 million in the same period of 2023. Free cash flow was RMB234.8 million (US$33.5 million), compared to free cash flow of RMB826.5 million in the same period of 2023.
As of September 30, 2024, the Company had cash, cash equivalents, short-term investments and long-term restricted cash included in prepayments and other assets of RMB4.7 billion (US$673.8 million). In August 2024, PAG drew down US$200.0 million under the loan facility, bringing the total draw down under the facility agreements to US$400.0 million as of September 30, 2024. As such, PAG’s repurchase right for the US$522.5 million principal of the convertible senior notes due January 2028 has been waived.
Conference Call Information
iQIYI’s management will hold an earnings conference call at 6:30 AM on November 21, 2024, U.S. Eastern Time (7:30 PM on November 21, 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 unique access PIN by a calendar invite.
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, non-GAAP 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 in isolation or as a substitute for the financial information prepared and presented 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 their usefulness 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 business combinations.
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 calculated by 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 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| September 30, | June 30, | September 30, | |||||||
| 2023 | 2024 | 2024 | |||||||
| RMB | RMB | RMB | |||||||
| (Unaudited) | (Unaudited) | (Unaudited) | |||||||
| Revenues: | |||||||||
| Membership services | 5,011,617 | 4,495,310 | 4,365,955 | ||||||
| Online advertising services | 1,674,260 | 1,461,367 | 1,336,932 | ||||||
| Content distribution | 537,058 | 698,175 | 814,028 | ||||||
| Others | 792,144 | 783,933 | 728,766 | ||||||
| Total revenues | **** | 8,015,079 | **** | **** | 7,438,785 | **** | **** | 7,245,681 | **** |
| Operating costs and expenses: | |||||||||
| Cost of revenues | (5,839,540 | ) | (5,678,342 | ) | (5,649,836 | ) | |||
| Selling, general and administrative | (981,409 | ) | (969,673 | ) | (907,885 | ) | |||
| Research and development | (447,383 | ) | (448,677 | ) | (449,039 | ) | |||
| Total operating costs and expenses | **** | (7,268,332 | ) | **** | (7,096,692 | ) | **** | (7,006,760 | ) |
| Operating income | **** | 746,747 | **** | **** | 342,093 | **** | **** | 238,921 | **** |
| Other income/(expense): | |||||||||
| Interest income | 45,219 | 68,688 | 69,044 | ||||||
| Interest expenses | (281,528 | ) | (288,162 | ) | (256,440 | ) | |||
| Foreign exchange (loss)/gain, net | (38,084 | ) | (51,338 | ) | 296,030 | ||||
| Gain/(loss) from equity method investments | 1,355 | (2,100 | ) | 4,627 | |||||
| Others, net | 18,802 | 32,476 | (104,867 | ) | |||||
| Total other (expense)/income, net | **** | (254,236 | ) | **** | (240,436 | ) | **** | 8,394 | **** |
| Income before income taxes | **** | 492,511 | **** | **** | 101,657 | **** | **** | 247,315 | **** |
| Income tax expense | (9,012 | ) | (25,741 | ) | (11,483 | ) | |||
| Net income | **** | 483,499 | **** | **** | 75,916 | **** | **** | 235,832 | **** |
| Less: Net income attributable to noncontrolling interests | 7,579 | 7,231 | 6,420 | ||||||
| Net income attributable to iQIYI, Inc. | **** | 475,920 | **** | **** | 68,685 | **** | **** | 229,412 | **** |
| Net income attributable to ordinary shareholders | **** | 475,920 | **** | **** | 68,685 | **** | **** | 229,412 | **** |
| Net income per share for Class A and Class B ordinary shares: | |||||||||
| Basic | 0.07 | 0.01 | 0.03 | ||||||
| Diluted | 0.07 | 0.01 | 0.03 | ||||||
| Net income per ADS (1 ADS equals 7 Class A ordinary shares): | |||||||||
| Basic | 0.50 | 0.07 | 0.24 | ||||||
| Diluted | 0.49 | 0.07 | 0.24 | ||||||
| Weighted average number of Class A and Class B ordinary shares used in net income pershare computation: | |||||||||
| Basic | 6,712,002,812 | 6,725,978,497 | 6,737,281,504 | ||||||
| Diluted | 6,850,839,094 | 6,857,915,450 | 6,779,359,665 |
iQIYI, INC.
Condensed Consolidated Balance Sheets
(In RMB thousands, except for number of shares and per share data)
| December 31, | September 30, | |||||
|---|---|---|---|---|---|---|
| 2023 | 2024 | |||||
| RMB | RMB | |||||
| (Unaudited) | ||||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | 4,434,525 | 3,241,336 | ||||
| Restricted cash | 6,120 | — | ||||
| Short-term investments | 941,738 | 936,267 | ||||
| Accounts receivable, net | 2,169,042 | 2,215,920 | ||||
| Prepayments and other assets | 2,794,259 | 2,302,748 | ||||
| Amounts due from related parties | 1,707,024 | 345,392 | ||||
| Licensed copyrights, net | 582,521 | 522,495 | ||||
| Total current assets | **** | 12,635,229 | **** | **** | 9,564,158 | **** |
| Non-current assets: | ||||||
| Fixed assets, net | 863,813 | 839,945 | ||||
| Long-term investments | 2,260,785 | 2,054,565 | ||||
| Licensed copyrights, net | 6,966,508 | 6,862,492 | ||||
| Intangible assets, net | 309,534 | 310,006 | ||||
| Produced content, net | 13,376,985 | 14,321,624 | ||||
| Prepayments and other assets | 3,518,210 | 3,508,104 | ||||
| Operating lease assets | 683,897 | 621,083 | ||||
| Goodwill | 3,820,823 | 3,820,823 | ||||
| Amounts due from related parties | 158,590 | 2,927,240 | ||||
| Total non-current assets | **** | 31,959,145 | **** | **** | 35,265,882 | **** |
| Total assets | **** | 44,594,374 | **** | **** | 44,830,040 | **** |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts and notes payable | 5,671,074 | 6,486,111 | ||||
| Amounts due to related parties | 2,953,658 | 3,267,320 | ||||
| Customer advances and deferred revenue | 4,373,208 | 4,320,866 | ||||
| Convertible senior notes, current portion | 2,802,442 | 16,668 | ||||
| Short-term loans | 3,571,637 | 4,347,147 | ||||
| Long-term loans, current portion | 2,000 | 36,800 | ||||
| Operating lease liabilities, current portion | 100,883 | 93,432 | ||||
| Accrued expenses and other liabilities | 2,866,632 | 2,883,646 | ||||
| Total current liabilities | **** | 22,341,534 | **** | **** | 21,451,990 | **** |
| Non-current liabilities: | ||||||
| Long-term loans | 97,990 | 496,951 | ||||
| Convertible senior notes | 8,143,994 | 8,187,011 | ||||
| Deferred tax liabilities | 824 | 34 | ||||
| Amounts due to related parties | 80,566 | 64,211 | ||||
| Operating lease liabilities | 523,747 | 464,837 | ||||
| Other non-current liabilities | 1,220,804 | 886,346 | ||||
| Total non-current liabilities | **** | 10,067,925 | **** | **** | 10,099,390 | **** |
| Total liabilities | **** | 32,409,459 | **** | **** | 31,551,380 | **** |
| Shareholders’ equity: | ||||||
| Class A ordinary shares | 237 | 238 | ||||
| Class B ordinary shares | 193 | 193 | ||||
| Additional paid-in capital | 54,971,469 | 55,439,943 | ||||
| Accumulated deficit | (44,573,428 | ) | (43,620,014 | ) | ||
| Accumulated other comprehensive income | 1,688,047 | 1,388,992 | ||||
| Non-controlling interests | 98,397 | 69,308 | ||||
| Total shareholders’ equity | **** | 12,184,915 | **** | **** | 13,278,660 | **** |
| Total liabilities and shareholders’ equity | **** | 44,594,374 | **** | **** | 44,830,040 | **** |
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, | June 30, | September 30, | |||||||
| 2023 | 2024 | 2024 | |||||||
| RMB | RMB | RMB | |||||||
| (Unaudited) | (Unaudited) | (Unaudited) | |||||||
| Net cash provided by operating activities | **** | 830,689 | **** | **** | 410,752 | **** | **** | 242,517 | **** |
| Net cash (used for)/provided by investing activities<br>^(1,2)^ | (55,245 | ) | 336,256 | (1,662,662 | ) | ||||
| Net cash provided by/(used for) financing activities | 269,189 | 865,894 | (2,611,570 | ) | |||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 4,587 | 23,113 | (83,808 | ) | |||||
| Net increase/(decrease) in cash, cash equivalents and restricted cash | **** | 1,049,220 | **** | **** | 1,636,015 | **** | **** | (4,115,523 | ) |
| Cash, cash equivalents and restricted cash at the beginning of the period | 5,082,365 | 6,271,368 | 7,907,383 | ||||||
| Cash, cash equivalents and restricted cash at the end of the period | 6,131,585 | 7,907,383 | 3,791,860 | ||||||
| Reconciliation of cash and cash equivalents and restricted cash: | |||||||||
| Cash and cash equivalents | 4,230,587 | 6,301,808 | 3,241,336 | ||||||
| Restricted cash | 6,120 | — | — | ||||||
| Long-term restricted cash | 1,894,878 | 1,605,575 | 550,524 | ||||||
| Total cash and cash equivalents and restricted cash shown in the statements of cashflows | **** | 6,131,585 | **** | **** | 7,907,383 | **** | **** | 3,791,860 | **** |
| Net cash provided by operating activities | **** | 830,689 | **** | **** | 410,752 | **** | **** | 242,517 | **** |
| Less: Capital expenditures ^(2)^ | (4,192 | ) | (28,299 | ) | (7,700 | ) | |||
| Free cash flow | **** | 826,497 | **** | **** | 382,453 | **** | **** | 234,817 | **** |
| (1) | Net cash provided by or used for investing activities primarily consists of net cash flows from loans provided<br>to related 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.<br> | ||||||||
| --- | --- |
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 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| September 30, | June 30, | September 30, | |||||||
| 2023 | 2024 | 2024 | |||||||
| RMB | RMB | RMB | |||||||
| Operating income | **** | 746,747 | **** | **** | 342,093 | **** | **** | 238,921 | **** |
| Add: Share-based compensation expenses | 145,730 | 157,791 | 128,190 | ||||||
| Add: Amortization of intangible<br>assets^(1)^ | 2,402 | 1,533 | 1,533 | ||||||
| Operating income (non-GAAP) | **** | 894,879 | **** | **** | 501,417 | **** | **** | 368,644 | **** |
| Net income attributable to iQIYI, Inc. | **** | 475,920 | **** | **** | 68,685 | **** | **** | 229,412 | **** |
| Add: Share-based compensation expenses | 145,730 | 157,791 | 128,190 | ||||||
| Add: Amortization of intangible<br>assets^(1)^ | 2,402 | 1,533 | 1,533 | ||||||
| Add: Disposal loss | — | — | 22,265 | ||||||
| Add: Impairment of long-term investments | — | 16,591 | 91,243 | ||||||
| Add: Fair value (gain)/loss of long-term investments | (1,756 | ) | 2,577 | 7,407 | |||||
| Add: Tax effects on non-GAAP adjustments^(2)^ | (225 | ) | (263 | ) | (263 | ) | |||
| Net income attributable to iQIYI, Inc.(non-GAAP) | **** | 622,071 | **** | **** | 246,914 | **** | **** | 479,787 | **** |
| Diluted net income per ADS | **** | 0.49 | **** | **** | 0.07 | **** | **** | 0.24 | **** |
| Add: Non-GAAP adjustments to earnings per ADS | 0.15 | 0.18 | 0.26 | ||||||
| Diluted net income per ADS (non-GAAP) | **** | 0.64 | **** | **** | 0.25 | **** | **** | 0.50 | **** |
| (1) | This represents amortization of intangible assets resulting from business combinations. | ||||||||
| --- | --- | ||||||||
| (2) | This represents tax impact of all relevant non-GAAP adjustments.<br> | ||||||||
| --- | --- |