iQIYI -5.9% as Q3 revenues fall 3%, subscribers decline
- iQIYI (NASDAQ:IQ) is 5.9% lower postmarket after Q3 earnings where it posted a better-than-expected loss but reported fewer subscribers than a year ago, in a period where online entertainment has been thriving, and guided to flat Q4 revenues at the midpoint.
- Revenues fell 3% to 7.2B yuan (about $1.1B), with sharp declines in ads and content distribution fees offsetting gains in membership services.
- Operating loss narrowed, though, to 1.2B yuan (about $1.78.2M) with a margin of 17%. Cost of revenues had fallen 22%, and R&D expenses fell 5% (mainly in compensation expense).
- And attributable net loss shrank to 1.2B yuan from a year-ago loss of 3.7B.
- Subscribing members were 104.8M as of Sept. 30; of those, 99.5% were paying subscribers. A year ago, the company reported 105.8M total subscribers.
- "Despite the turbulence this year, we have leveraged a number of strategies, such as launching theater-themed content and upgrading our membership portfolio, to improve our service and to better serve our users," says founder and CEO Yu Gong. "In the coming quarters, we may continue to see fluctuations in the number of subscribers, driven by the normalization of user behavior and content pipeline."
- Revenue breakout: Membership services, 3.976B yuan (up 7%); Online advertising services, 1.84B yuan (down 11%); Content distribution, 392.3M yuan (down 42%); Others, 979.6M yuan (up 5.1%).
- For Q4, it's guiding to total net revenues of 7.28B-7.73B yuan (about $1.07B-$1.14B) - a growth rate between -3% to 3%.
- Conference call to come at 7 p.m. ET.
- Press release