Chinese online entertainment video services provider iQIYI announced its unaudited financial results for the first quarter of 2024. The company reported that total revenues were RMB 7.9 billion ($1.1 billion), decreasing 5% year over year. Operating income was RMB 944.8 million ($130.8 million), increasing 10% year over year. Operating income margin was 12%, compared to operating income margin of 10% in the same period in 2023. Non-GAAP operating income was RMB 1.1 billion ($150.4 million), increasing 5% year over year. Non-GAAP operating income margin was 14%, compared to non-GAAP operating income margin of 12% in the same period in 2023.
Net income attributable to iQIYI was RMB 655.3 million ($90.8 million), compared to net income attributable to iQIYI of RMB 618.1 million in the same period in 2023. Non-GAAP net income attributable to iQIYI2 was RMB 844.3 million ($116.9 million), compared to non-GAAP net income attributable to iQIYI of RMB939.5 million in the same period in 2023.
“Our operating profits and corresponding margins reached historical highs, thanks to our quality execution and increased operating efficiency,” commented Mr. Yu Gong, Founder, Director, and Chief Executive Officer of iQIYI. “The initial integration of generative AI into our operations is already yielding promising results. We are eager to harness the power of this innovative technology to improve our capacity for delivering top-tier content and to expand our growth possibilities.”
“We have been generating positive operating cash flow for eight consecutive quarters, and our balance sheet continued to improve,” commented Mr. Jun Wang, Chief Financial Officer of iQIYI. “This makes our business more defensible and offers us more tools to improve shareholder value over time.”
Membership services revenue was RMB 4.8 billion ($664.6 million), decreasing 13% year over year. The decrease was primarily due to the high base effect in the same period last year. Meanwhile, online advertising services revenue was RMB 1.5 billion ($205.3 million), increasing 6% year over year. The increase was primarily driven by the growth of performance-based advertising business.
Content distribution revenue was RMB 928.0 million ($128.5 million), increasing 27% year over year, primarily driven by the distribution of several major titles. Other revenues were RMB 718.4 million ($99.5 million), increasing 8% year over year, primarily driven by the increase of revenue derived from third-party cooperation.
Cost of revenues was RMB 5.6 billion ($779.9 million), decreasing 5% year over year. Content costs as a component of cost of revenues were RMB 4 billion ($553.5 million), decreasing 5% year over year. The decrease in content cost was driven by our improvement in content strategy and operating efficiency.
Selling, general and administrative expenses were RMB 922.0 million ($127.7 million), decreasing 17% year over year. The decrease was primarily due to disciplined marketing spending and reversal of allowance for credit losses. Research and development expenses were RMB 429.3 million (US$59.5 million), flat year over year. Total other expense was RMB 261.3 million ($36.2 million), increasing 25% year over year, primarily due to loss from foreign exchange, less interest income and non-operating income related to the repurchase of convertible senior notes, partially offset by less loss pick-up from equity method investments.
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