iQiyi Inc. (NASDAQ: IQ) released its first-quarter 2026 financial results on May 18th. The report shows total revenue for the quarter reached 6.23 billion yuan, with membership service revenue showing sequential growth. Overseas membership revenue achieved its best historical performance.
Simultaneously, following several years of widespread contraction, cost-cutting, and adjustments within the long-form video industry, iQiyi is signaling a renewed "offensive" strategy: continuing to bet on high-quality content while fully embracing AI.
Behind the financial figures, a noteworthy change is iQiyi's attempt to recombine its hit-making capabilities, AI production capabilities, and overseas growth potential into a new growth logic.
Founder and CEO Gong Yu stated, "We are consolidating our core business, igniting new growth engines, and building for long-term development. In the first quarter, hit series drove sequential growth in membership revenue, and our market share in effective viewership led the industry. At the same time, the overseas business maintained its strong growth momentum. Moving forward, we will utilize AI to reduce content production costs, accelerate the production process, and continuously enrich our content ecosystem."
Acting CFO Zeng Ying noted, "In March, iQiyi announced plans for a listing on the Main Board of The Stock Exchange of Hong Kong and launched its first share repurchase program, demonstrating the company's commitment to creating value for shareholders."
**Hit Content Drives Sequential Membership Growth** One positive signal from iQiyi's Q1 performance was the sequential growth in membership revenue. This business segment generated 4.2 billion yuan in revenue for the quarter, a 2% increase sequentially. Among other businesses, online advertising services revenue was 1.24 billion yuan, content distribution revenue was 360 million yuan, and other revenue was 430 million yuan.
Total costs for the quarter were 5.23 billion yuan, a 3% year-over-year decrease. Content costs, the primary component, amounted to 3.74 billion yuan. Selling and administrative expenses and R&D expenses for the quarter were 820 million yuan and 400 million yuan, respectively.
Against the backdrop of an overall maturing long-form video industry, the rebound in membership revenue signifies that the platform's content supply is once again exerting a pulling effect.
iQiyi's series performed notably well this quarter. According to Yunhe Data, its market share in effective series viewership remained the highest in the industry. "Punishment Crime 2" and "Chasing Jade" surpassed 10,000 in content popularity index, while the self-produced period drama "How Improper" exceeded 9,000. In variety shows, "Universe Flicker, Please Note" ranked first in cumulative effective viewership for Q1. High-quality animated series like "The Great Ruler Year 2" and "How Improper Season 2" received positive audience feedback.
The currently airing iQiyi-produced alternative absurd crime drama "Low IQ Crime," praised for its innovative blend of comedy and suspense, saw its content popularity index surpass 10,000 on May 13th, becoming the platform's third series this year to achieve this milestone.
Chief Content Officer Wang Xiaohui also mentioned that the efficiency of handling infringement cases has improved significantly, and it is believed that piracy issues will see notable improvement in the future. Strong copyright protection can safeguard the commercial interests of all industry stakeholders, boost investment willingness in quality content creation, and form a positive cycle for content supply.
**Another notable business area is overseas operations.** Gong Yu highlighted that Q1 overseas membership revenue reached a record high, with the overseas business maintaining strong growth momentum. Although the company did not disclose specific figures, this has become one of iQiyi's stable new growth sources in recent years.
In recent years, Chinese film and television content has been breaking through international barriers. Period dramas, suspense series, and animated content have gradually cultivated stable audiences in markets like Southeast Asia, the Middle East, and Chinese-speaking communities in North America. Some Chinese platforms are shifting from "copyright sales" to more long-term localized operations, including membership system development, subtitle and dubbing capabilities, and local marketing.
iQiyi executives stated today that overseas efforts will continue to strengthen operations in Southeast Asia, including Thailand, Indonesia, Malaysia, and promising markets like Vietnam and the Philippines, while also increasing investment in content revenue growth and marketing in the Americas.
Moving forward, iQiyi's overseas initiatives will also focus on promoting content, especially idol dramas, to attract users with increased promotional efforts. Regarding local content, iQiyi stated it will control the pace and quantity of investment. In mature markets, it will continue to strengthen cooperation with various partners to enhance member growth. Overall, the ARPU of overseas users is higher than that of domestic users.
In essence, the growth of iQiyi's overseas business signifies that Chinese long-form video platforms are gradually transitioning from simple content export to exporting more complete platform capabilities. For these platforms, this not only means new revenue streams but also an extended lifecycle for content.
The underlying driver of this change remains the return to the value of "good content." Executives also revealed on today's earnings call that the second quarter will see increased efforts to re-engage lapsed members and add more content accessible to members. Furthermore, through joint operations with TV manufacturers, iQiyi aims to increase its user base on large screens and the proportion of membership revenue derived from them.
Additionally, during the 618 marketing period, iQiyi will strengthen the sales of annual memberships and co-branded memberships to increase the overall member scale and effectively extend membership cycles.
**AI as a Game-Changer** If quality content is iQiyi's present, then AI is the key variable it is betting on for the future. Particularly as AI technology permeates the film and television industry chain and premium content once again drives user willingness to pay, platforms are seeking their position in the new cycle.
In the first quarter, iQiyi significantly accelerated its AI-related initiatives. The company disclosed that the "Peter Pau · iQiyi AI Theater" has launched 16 works, covering genres like sci-fi, thriller, martial arts, and fantasy. All this content was produced using iQiyi's self-developed film and television production platform, "NaDou Pro."
NaDou Pro is built on a foundation of public large models and self-deployed large models. It incorporates iQiyi's extensive experience in film and television industrialization and professional content production into self-developed intelligent agents for production. Combined with iQiyi's IP library, digital asset library, and creator community, it forms a unique, callable platform capability, providing creators with one-stop support across the entire chain from content production to operations and commercial partnerships.
During today's call, Gong Yu revealed that since its launch in April, NaDou Pro has attracted over ten thousand active users, including creators from traditional film companies and new independent creators. Furthermore, the overseas version of NaDou Pro is set to launch soon.
He stated that NaDou Pro, as an independent product, will undergo continuous R&D and iteration, with the weekly token consumption for the product rapidly increasing.
For the film and television industry, AI is bringing about changes in production logic not seen in decades.
Traditionally, a long series often required collaboration from a team of hundreds, spanning scriptwriting, storyboarding, filming, and post-production over months or even years. With the maturation of AI video generation technology, content production costs and cycles are being drastically compressed, enabling more creators to produce long-form content.
Gong Yu previously mentioned that AI could increase future content supply by at least "a hundredfold." This also implies that the highly centralized production model traditionally used by long-form video platforms is facing challenges.
Not long ago, iQiyi proposed its most significant model transformation since its founding 16 years ago—shifting from a centralized platform to a decentralized content ecosystem. The platform will no longer be the sole decision-making center for content. In the future, more content will be decided by creators themselves, facing market feedback directly, and revenue-sharing models will also be upgraded. The platform will focus on providing technological capabilities, distribution systems, and foundational rules.
Gong Yu stated today that these measures will further raise the ceiling for content supply, thereby attracting more users to the platform and forming a positive flywheel effect. He said, looking back at the development of short videos and short dramas over the past decade, they grew because technological innovation or other factors lowered creation costs and barriers to entry. He believes the same pattern will apply to long-form video.
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