Abstract
iQiyi Inc. will release its fourth-quarter 2025 results on February 26, 2026 Pre-Market. This preview summarizes last quarter’s performance, current-quarter projections for revenue, gross margin, net profit or margin, and adjusted EPS with year-over-year context, alongside core business segment dynamics and prevailing analyst opinions.
Market Forecast
The market’s latest consolidated forecast points to iQiyi Inc. delivering approximately $6.77 billion in fourth-quarter revenue with an estimated year-over-year increase of 2.17%, adjusted EPS around -$0.02 with a year-over-year change of 92.06%, and EBIT near -$4.67 million with a year-over-year decline of 101.73%; forecasts for gross profit margin and net profit margin are not disclosed. The company’s core platform businesses are anticipated to benefit from steady membership revenue stability and selective advertising recovery, while content licensing remains an operational lever; the most promising segment is Membership Services, supported by scale and pricing resilience, with revenue of $4.21 billion and a year-over-year context implied by stable sequential trends.
Last Quarter Review
In the third quarter of 2025, iQiyi Inc. reported total revenue of $6.68 billion, a gross profit margin of 18.19%, GAAP net profit attributable to the parent company of -$249.00 million, a net profit margin of -3.73%, and adjusted EPS of -$0.26, with year-over-year revenue down 7.77%, EPS down 208.33%, and EBIT at -$121.81 million, reflecting a challenging content and macro environment. A notable highlight was revenue execution above internal estimates by $67.19 million, showing resilient monetization despite softness in ad demand and higher content investment. Main business performance remained anchored by Membership Services at $4.21 billion revenue, with Online Advertising Services contributing $1.24 billion, Content Distribution at $0.64 billion, and Other services at $0.59 billion, indicating sustained subscription-led mix.
Current Quarter Outlook
Membership Services
Membership Services is expected to be the central driver of operational stability this quarter, supported by paid subscriber retention initiatives and the continued refinement of tiered pricing and promotional strategies. With last quarter’s membership revenue at $4.21 billion, the segment’s scale provides a cushion against cyclical ad fluctuations and gives management room to balance content investment with monetization. The key watchpoint is engagement depth, as high-quality original dramas and variety shows typically improve stickiness and reduce churn, thereby preserving average revenue per membership even during macro softness. Assuming consistent content output cadence, membership billing should track near or slightly above recent levels; however, any prolonged content delays or regulatory adjustments affecting distribution could dampen conversion and renewal rates.
Online Advertising Services
Online advertising remains a swing factor for the stock in the near term. The prior quarter’s $1.24 billion revenue performance shows the business can still contribute meaningfully, but it is exposed to the broader brand and performance advertising cycles. If consumer-facing advertisers maintain cautious budget allocations, inventory fill and CPMs may lag historical peaks, limiting margin uplift. iQiyi Inc. has increasingly leaned on ad-tech optimization, targeted placements around premium content windows, and performance-based products to stabilize yields. Still, sentiment-sensitive categories like e-commerce, smartphones, and entertainment may vary materially based on seasonal campaign timing and macro signals. A modest sequential improvement is possible into the holiday corridor, but visibility remains limited, and a weaker-than-expected ad backdrop would push the overall margin profile lower due to the segment’s operating leverage.
Content Distribution and Licensing
Content Distribution at $0.64 billion revenue last quarter plays an important role in offsetting production costs and smoothing cash flow. Licensing of premium originals to third parties provides incremental monetization without diluting in-platform value, especially for titles that have exhausted peak viewing cycles domestically. The strategy hinges on a careful balance: keeping flagship content exclusive long enough to attract and retain members, then syndicating to maximize lifetime value. This quarter, licensing could modestly support revenue mix given multiple content windows crossing into sellable phases; however, success depends on partner demand and acceptance of pricing terms. Any pullback in buyers’ budgets or shifts in content policy by distribution partners could pressure volumes, though a diversified buyer base mitigates concentration risk.
Cost Discipline and Margin Dynamics
Management’s cost discipline remains central to achieving improved margin trajectories. The last quarter’s gross margin of 18.19% reflects a balance between content amortization curves and monetization efficiency, but the net margin at -3.73% indicates ongoing pressure from operating expenses and investment needs. For the current quarter, gross margin performance will depend on the release slate’s mix of high-cost tentpoles versus lower-cost catalog, alongside efficiency gains in content production and delivery. Operational savings through technology infrastructure, cloud utilization, and traffic engineering can incrementally reduce bandwidth and storage costs. If membership billing stabilizes and content amortization does not spike, gross margin could hold near recent levels; conversely, a heavier slate without corresponding engagement uplift would compress margin and risk a deeper net loss.
Key Stock Price Drivers
The stock’s near-term performance will likely respond to three tangible factors: membership growth trajectory, advertising demand elasticity, and the magnitude of operating loss versus expectations. Strong membership retention and upselling into higher-value tiers would provide confidence in revenue durability, while signs of ad recovery—measured by improved fill, CPMs, and brand campaign breadth—would lift sentiment. On the downside, if adjusted EPS undershoots the -$0.02 estimate, or EBIT loss exceeds the -$4.67 million forecast, investors may question the pace of the path to profitability, particularly if gross margin fails to show stabilization. Disclosures on content pipeline, release timing, and sequential engagement metrics will be pivotal for interpreting operating leverage potential into the second half of the year.
Analyst Opinions
Most recent institutional commentary skews bullish for iQiyi Inc., with buy-rated views citing structural membership scale and content quality as key long-term advantages despite near-term pressures. CMB International Securities maintained a Buy rating and a $2.70 target, highlighting strategic focus and monetization potential through premium content and retention initiatives that support medium-term growth. This constructive stance aligns with the broader view that improving membership economics and disciplined content investment can gradually narrow losses even if advertising remains unpredictable. The bullish perspective emphasizes the company’s ability to balance growth ambitions with cost control, and that sequential progress in margin stabilization—combined with select content licensing—can underpin better operating outcomes across 2026. Investors will watch whether management’s guidance brackets near the consensus for revenue and EPS, but the prevailing opinion expects iQiyi Inc. to demonstrate incremental improvement on core KPIs and to articulate pathways to monetization expansion, including further pricing optimizations and enhanced ad-tech efficiency.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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