iQIYI Announces Fourth Quarter and Fiscal Year 2021 Financial Results
iQIYI, Inc. (Nasdaq: IQ) (“iQIYI” or the “Company”), an innovative market-leading online entertainment service in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2021.
Fourth Quarter 2021 Highlights
- Total revenues were RMB7.4 billion (US$1.2 billion[1]), approximately flat from the same period in 2020.
- Operating loss was RMB975.2 million (US$153.0 million) and operating loss margin was 13%, compared to operating loss of RMB1.3 billion and operating loss margin of 18% in the same period in 2020.
- Non-GAAP operating loss[2] was RMB515.5 million (US$80.9 million) and non-GAAP operating loss margin was 7%, compared to non-GAAP operating loss of RMB940.7 million and non-GAAP operating loss margin of 13% in the same period in 2020.
- Net loss attributable to iQIYI was RMB1.8 billion (US$278.7 million), compared to net loss attributable to iQIYI of RMB1.5 billion in the same period in 2020.
- Non-GAAP net loss attributable to iQIYI[2] was RMB1.0 billion (US$157.2 million), compared to non-GAAP net loss attributable to iQIYI of RMB1.2 billion in the same period in 2020.
Fiscal Year 2021 Highlights
- Total revenues were RMB30.6 billion (US$4.8 billion), representing a 3% increase from 2020.
- Operating loss was RMB4.5 billion (US$702.9 million) and operating loss margin was 15%, compared to operating loss of RMB6.0 billion and operating loss margin of 20% in 2020.
- Non-GAAP operating loss was RMB3.0 billion (US$474.9 million) and non-GAAP operating loss margin was 10%, compared to non-GAAP operating loss of RMB4.5 billion and non-GAAP operating loss margin of 15% in 2020.
- Net loss attributable to iQIYI was RMB6.2 billion (US$968.1 million), compared to net loss attributable to iQIYI of RMB7.0 billion in 2020.
- Non-GAAP net loss attributable to iQIYI was RMB4.5 billion (US$704.1 million), compared to non-GAAP net loss attributable to iQIYI of RMB5.4 billion in 2020.
“We would like our shareholders to recognize that iQIYI is leading the opening of a new chapter in the Chinese long-form video industry. Starting from the fourth quarter of 2021, we launched a series of initiatives to optimize our cost and improve our organizational alignment. The results have been very encouraging. We significantly improved our operating and cost efficiency, while maintaining our industry-leading position in terms of various user metrics.” commented Mr. Yu Gong, Founder, Director, and Chief Executive Officer of iQIYI. “Our goal is to reach non-GAAP operating break-even for the full year of 2022 and to reach quarterly non-GAAP operating break-even as early as possible, while maintaining our competitive advantage as the industry leader. I am delighted to see that we are moving in the right direction.”
“With the initial successes of our cost optimization strategy, our operating loss for the fourth quarter decreased by 25% annually and 29% sequentially, and our non-GAAP operating loss for the fourth quarter also decreased significantly by 45% annually and 52% sequentially, exceeding our expectations,” commented Mr. Jun Wang, Chief Financial Officer of iQIYI. “For the upcoming first quarter of 2022, we expect to see further significant improvements for both GAAP and non-GAAP operating losses compared with the fourth quarter of 2021. The strength of our business fundamentals will support our leadership and growth over the long run.”
Fourth Quarter and Fiscal Year 2021 Financial Highlights
|
Three Months Ended |
Year Ended |
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|
(Amounts in thousands of Renminbi |
Dec 31, |
Sep 30, |
Dec 31, |
Dec 31, |
Dec 31, |
|||||
|
2020 |
2021 |
2021 |
2020 |
2021 |
||||||
|
RMB |
RMB |
RMB |
RMB |
RMB |
||||||
|
Total revenues |
7,458,180 |
7,589,104 |
7,388,558 |
29,707,215 |
30,554,359 |
|||||
|
Operating loss |
(1,307,373) |
(1,367,958) |
(975,227) |
(6,040,509) |
(4,479,207) |
|||||
|
Operating loss (non-GAAP) |
(940,684) |
(1,072,950) |
(515,539) |
(4,475,939) |
(3,026,073) |
|||||
|
Net loss attributable to iQIYI, Inc. |
(1,547,614) |
(1,729,560) |
(1,775,787) |
(7,038,361) |
(6,169,584) |
|||||
|
Net loss attributable to iQIYI, Inc. |
(1,177,317) |
(1,399,458) |
(1,001,851) |
(5,445,255) |
(4,487,079) |
|||||
|
Diluted net loss per ADS |
(2.10) |
(2.17) |
(2.24) |
(9.52) |
(7.77) |
|||||
|
Diluted net loss per ADS (non- |
(1.60) |
(1.76) |
(1.26) |
(7.37) |
(5.65) |
|||||
|
Footnotes: |
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|
[1] Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB6.3726 as of December 30, 2021, as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. Translations are provided solely for the convenience of the reader. |
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[2] Non-GAAP measures are defined in the Non-GAAP Financial Measures section (see also “Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures” for more details). |
Fourth Quarter 2021 Other Operating Highlights
- The average daily number of total subscribing members for the quarter was 97.0 million, compared to 102.7 million for the same period in 2020 and 104.7 million for the third quarter in 2021. The average daily number of subscribing members excluding individuals with trial memberships for the quarter was 96.4 million, compared to 101.9 million for the same period in 2020 and 103.8 million for the third quarter in 2021. The average daily number of total subscribing members for a quarter is calculated by averaging the number of total subscribing members in each day of such quarter. The average daily number of subscribing members excluding individuals with trial memberships for the quarter is calculated by averaging the number of subscribing members excluding individuals with trial memberships in each day of such quarter.
- The monthly average revenue per membership (ARM) for the fourth quarter was RMB14.16, compared to RMB12.45 for the same period in 2020 and RMB13.65 for the third quarter in 2021. The monthly ARM for the quarter is calculated by dividing our total revenues from membership services during a given quarter by the average daily number of total subscribing members for that quarter and the number of months in the quarter.
Fourth Quarter 2021 Financial Results
Total revenues reached RMB7.4 billion (US$1.2 billion), approximately flat compared with the same period in 2020.
Membership services revenue was RMB4.1 billion (US$646.6 million), representing a 7% increase from the same period in 2020. This was primarily attributable to the increase of our membership ARM associated with our membership pricing adjustment and various initiatives to improve our monetization capabilities.
Online advertising services revenue was RMB1.7 billion (US$261.2 million), representing a 10% decrease from the same period in 2020, primarily due to the delays of premium content released during the quarter and the challenging macroeconomic environment in China.
Content distribution revenue was RMB761.5 million (US$119.5 million), representing a 5% decrease from the same period in 2020.
Other revenues were RMB841.8 million (US$132.1 million), representing a 12% decrease from the same period in 2020. The decrease was primarily due to the soft performance of various business lines.
Cost of revenues was RMB6.5 billion (US$1.0 billion), representing a 4% decrease from the same period in 2020. The decrease in cost of revenues was primarily due to lower content costs during the quarter. Content costs as a component of cost of revenues were RMB4.9 billion (US$763.5 million), representing a 5% decrease from the same period in 2020. The decrease of content cost was benefitted from our efforts in cost control and improvement in operating efficiency.
Selling, general and administrative expenses were RMB1.1 billion (US$171.5 million), representing a 17% decrease from the same period in 2020. The decrease was primarily due to lower marketing spending and share-based compensation expenses, partially offset by the non-recurring employee severance costs associated with the optimization of our organizational structure.
Research and development expenses were RMB763.1 million (US$119.8 million), representing a 15% increase from the same period in 2020. The increase was primarily due to non-recurring employee severance costs associated with the optimization of our organizational structure.
Operating loss was RMB975.2 million (US$153.0 million), compared to operating loss of RMB1.3 billion in the same period in 2020. Operating loss margin was 13%, compared to operating loss margin of 18% in the same period in 2020. Non-GAAP operating loss was RMB515.5 million (US$80.9 million) and non-GAAP operating loss margin was 7%, compared to non-GAAP operating loss of RMB940.7 million and non-GAAP operating loss margin of 13% in the same period in 2020.
Total other expense was RMB753.4 million (US$118.2 million), compared to total other expense of RMB241.0 million during the same period of 2020. The year-over-year variance was mainly due to increased loss derived from equity investees and the increased interest expenses associated with our financing activities.
Loss before income taxes was RMB1.7 billion (US$271.3 million), compared to loss before income taxes of RMB1.5 billion in the same period in 2020.
Income tax expense was RMB36.5 million (US$5.7 million), compared to income tax benefit of RMB16.3 million in the same period in 2020.
Net loss attributable to iQIYI was RMB1.8 billion (US$278.7 million), compared to net loss attributable to iQIYI of RMB1.5 billion in the same period in 2020. Diluted net loss attributable to iQIYI per ADS was RMB2.24 (US$0.35) for the fourth quarter of 2021, compared to diluted net loss attributable to iQIYI per ADS of RMB2.10 in the same period of 2020. Non-GAAP net loss attributable to iQIYI was RMB1.0 billion (US$157.2 million), compared to non-GAAP net loss attributable to iQIYI of RMB1.2 billion in the same period in 2020. Non-GAAP diluted net loss attributable to iQIYI per ADS was RMB1.26 (US$0.20), compared to non-GAAP diluted net loss attributable to iQIYI per ADS of RMB1.60 in the same period of 2020.
As of December 31, 2021, the Company had cash, cash equivalents, restricted cash and short-term investments of RMB4.4 billion (US$694.1 million).
Fiscal Year 2021 Financial Results
Total revenues reached RMB30.6 billion (US$4.8 billion), representing a 3% increase from 2020.
Membership services revenue was RMB16.7 billion (US$2.6 billion), representing a 1% increase from 2020.
Online advertising services revenue was RMB7.1 billion (US$1.1 billion), representing a 4% increase from 2020.
Content distribution revenue was RMB2.9 billion (US$448.1 million), representing a 7% increase from 2020.
Other revenues were RMB3.9 billion (US$614.9 million), representing a 5% increase from 2020.
Cost of revenues was RMB27.5 billion (US$4.3 billion), representing a 1% decrease from 2020. Content costs as a component of cost of revenues were RMB20.7 billion (US$3.3 billion), representing a 1% decrease from 2020.
Selling, general and administrative expenses were RMB4.7 billion (US$741.5 million), representing a 9% decrease from 2020.
Research and development expenses were RMB2.8 billion (US$438.6 million), representing a 4% increase from 2020.
Operating loss was RMB4.5 billion (US$702.9 million), compared to operating loss of RMB6.0 billion in 2020. Operating loss margin was 15%, compared to operating loss margin of 20% in 2020. Non-GAAP operating loss was RMB3.0 billion (US$474.9 million) and non-GAAP operating loss margin was 10%, compared to non-GAAP operating loss of RMB4.5 billion and non-GAAP operating loss margin of 15% in 2020.
Total other expense was RMB1.5 billion (US$240.5 million), compared to total other expense of RMB943.4 million in 2020. The year-over-year variance was mainly due to the increased interest expenses associated with our financing activities and increased loss derived from equity investees.
Loss before income taxes was RMB6.0 billion (US$943.4 million), compared to loss before income taxes of RMB7.0 billion in 2020.
Income tax expense was RMB96.5 million (US$15.2 million), compared to income tax expense of RMB23.3 million in 2020.
Net loss attributable to iQIYI was RMB6.2 billion (US$968.1 million), compared to net loss attributable to iQIYI of RMB7.0 billion in 2020. Diluted net loss attributable to iQIYI per ADS was RMB7.77 (US$1.19) for 2021, compared to diluted net loss attributable to iQIYI per ADS of RMB9.52 in 2020. Non-GAAP net loss attributable to iQIYI was RMB4.5 billion (US$704.1 million), compared to non-GAAP net loss attributable to iQIYI of RMB5.4 billion in 2020. Non-GAAP diluted net loss attributable to iQIYI per ADS was RMB5.65 (US$0.87), compared to non-GAAP diluted net loss attributable to iQIYI per ADS of RMB7.37 in 2020.
Conference Call Information
iQIYI’s management will hold an earnings conference call at 6:30 AM on March 1, 2022, U.S. Eastern Time (7:30 PM on March 1, 2022, Beijing Time).
Please register in advance of the conference using the link provided below. Upon registering, you will be provided with participant dial-in numbers, Direct Event passcode and unique registrant ID by email.
Participant Online Registration: http://apac.directeventreg.com/registration/event/4352468
It will automatically direct you to the registration page of “iQIYI Fourth quarter and Fiscal Year 2021 Earnings Conference Call,” where you may fill in your details for RSVP. If it requires you to enter a participant conference ID, please enter “4352468”.
In the 10 minutes prior to the call start time, you may use the conference access information (including dial-in number(s), Direct Event passcode and unique registrant ID) provided in the confirmation email that you have received following your pre-registration.
A telephone replay of the call will be available after the conclusion of the conference call through March 8, 2022.
Dial-in numbers for the replay are as follows:
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International Dial-in |
+61 2 8199 0299 |
|
Passcode: |
4352468 |
A live and archived webcast of the conference call will be available at http://ir.iqiyi.com/.
Source: iQIYI, Inc.