iQIYI reported fourth‑quarter 2025 results with total revenue of RMB6.79 billion (US$971.6 million), a 3% year‑over‑year increase, and operating income of RMB55.4 million (US$7.9 million) representing a 1% margin, down from 4% in the same period a year earlier. Net loss attributable to iQIYI narrowed to RMB5.8 million (US$0.8 million) from a loss of RMB189.4 million a year earlier. Non‑GAAP earnings per share of RMB0.11 (US$0.02) beat analyst expectations of a loss of RMB0.0172 per share, a surprise of 180%.
Revenue growth was driven by a 94% jump in content distribution revenue, which rose to RMB787.7 million (US$112.6 million). Membership services revenue remained flat at RMB4.11 billion (US$587.1 million), while online advertising revenue fell 6% to RMB1.35 billion (US$193.4 million). The sequential quarter‑on‑quarter increase in revenue was 2%, reflecting a modest rebound in content distribution and stable membership.
Operating margin compression was largely a result of higher content costs, which increased 11% year‑over‑year to RMB3.83 billion, and a 7% rise in SG&A expenses. Cost of revenues climbed 8% to RMB5.38 billion, driven by the higher content spend. The shift toward lower‑margin content distribution and increased marketing spend contributed to the drop in operating income margin from 4% to 1%.
Full‑year 2025 revenue fell 7% to RMB27.29 billion (US$3.90 billion) from RMB29.12 billion a year earlier, reflecting softer membership and advertising trends and a 12% decline in content distribution revenue. Net loss for the year widened to RMB1.09 billion (US$155.5 million) from a profit of RMB1.02 billion a year earlier, and free cash flow collapsed to RMB10.0 million from RMB2.03 billion in 2024.
CEO Yu Gong highlighted the company’s IP‑centric strategy and the growth of overseas membership, noting that the launch of the first iQIYI LAND experience venue marked a new growth engine. CFO Ying Zeng added that Q4 revenue grew 2% sequentially and that content costs were 5% lower than the prior quarter, reflecting a more curated acquisition strategy focused on quality.
Investors reacted positively to the earnings, citing the strong EPS beat and the narrowing net loss as evidence of improving profitability, while noting the continued margin pressure and revenue decline as areas of concern.
The content on EveryTicker is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.