This announcement contains forward-looking statements. These statements are made under the "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 this announcement, 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 to shareholders, in press releases and other written materials and in oral statements made by its 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 forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: iQIYI's strategies; iQIYI's future business development, financial condition and results of operations; iQIYI's ability to retain and increase the number of users, members and advertising 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 the press 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, 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 per share
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
(MORE TO FOLLOW) Dow Jones Newswires
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