iQIYI, Inc.(Nasdaq: IQ), an innovative market-leading online entertainment service inChina, today announced its unaudited financial results for the second quarter ended June 30, 2022.
SecondQuarter 2022 Highlights
- Total revenues were RMB6.7 billion (US$993.8 million1), decreasing 13% year over year.
- Membership services revenue was RMB4.3 billion (US$639.7 million), increasing 7% year over year.
- Operating income was RMB125.8 million (US$18.8 million) and operating income margin was 2%, compared to operating loss ofRMB1.1 billionand operating loss margin of 15% in the same period in 2021.
- Non-GAAP operating income was RMB343.8 million (US$51.3 million) and non-GAAP operating income margin was 5%, compared to non-GAAP operating loss of RMB779.4 million and non-GAAP operating loss margin of 10% in the same period in 2021.
- Net loss attributable to iQIYI was RMB214.0 million (US$31.9 million), compared to net loss attributable to iQIYI of RMB1.4 billion in the same period in 2021.
- Non-GAAP net income attributable to iQIYI was RMB78.3 million (US$11.7 million), compared to non-GAAP net loss attributable to iQIYI of RMB1.1 billion in the same period in 2021.
"We fought against the gravity of macro downturn throughout the second quarter of 2022 and booked operating profit growth. The process was extremely challenging, but the result was absolutely remarkable." commented Mr.Yu Gong, Founder, Director, and Chief Executive Officer of iQIYI."In the third quarter, we built important partnership with Douyin and PAG.This together with the positive momentum of a series of blockbuster new releases makes us more confident than ever that we will be able to deliver greater profit growth in the future."
"Our gross margin expanded in the last three consecutive quarters, reflecting ongoing gains in the ROI of our content business. Meanwhile, we kept our spending disciplined and stabilized total operating expenses in the second quarter." commented Mr.Jun Wang, Chief Financial Officer of iQIYI. "We are committed to building a healthy and sustainable business that generates long-term value for our stakeholders."
iQIYI shares gained nearly 4% in premarket trading.
iQIYI Announces US$500 Million Private Placement of Convertible Notes with PAG
iQIYI, Inc. (Nasdaq: IQ) today announced that the Company has entered into a definitive agreement with PAG Asia, PAG Pegasus and/or their affiliates (collectively, the "Investors"), a leading investment firm inAsia, pursuant to which the Investors will subscribe for an aggregate amount of US$500 millionconvertible notes (the "Notes") to be issued by the Company. The Company has granted the Investors an option, exercisable within two months from the closing date of the transaction, to subscribe for an additional amount of up toUS$50 millionof the Notes, under the same terms and conditions. The transaction is expected to close in the fourth quarter of 2022, subject to closing conditions.
The Notes will bear an interest rate of 6% per annum and will mature on the fifth anniversary of the issuance date. The Notes may be convertible into the Company's American depositary shares, each currently representing seven Class A ordinary shares of the Company, at the holder's option and subject to the terms of the Notes, at a conversion premium of 20% above the volume weighted average price of the 20 trading days prior to, and including,August 29, 2022. Holders of the Notes have the right to require the Company to repurchase for cash all or part of their Notes, at a repurchase price equal to 120% and 130% of the principal amount of the Notes on or shortly after the third anniversary of the issuance date and the fifth anniversary of the issuance date, respectively. Holders also have the right to require the Company to repurchase for cash all or part of their Notes in the event of certain fundamental changes. Upon closing of the transaction and satisfaction of certain condition, PAG Asia shall be entitled to appoint one member to the board of directors of the Company.