Date: April 26, 2024
Time: 8:00 AM EDT
Operator:
Good day, everyone. Welcome to the IQIYI First Quarter 2024 Earnings Results Call.
Today’s call will be led by our CEO, Gong Yu; our CFO, Wang Xiaohui; and our COO, Wang Xiaoyan.
Before we begin, I would like to remind you that during today’s call, we may make forward-looking statements. These statements are based on our current expectations and assumptions and are subject to risks and uncertainties. Actual results could differ materially from these expectations.
Additionally, during the call, we will refer to non-IFRS financial measures. A reconciliation of these measures to the most directly comparable IFRS measures can be found in our earnings press release.
Thank you. Now, I’d like to turn the call over to our CEO, Gong Yu.
Gong Yu:
Thank you, operator.
Good morning, everyone. Thank you for joining us today.
I am pleased to report that IQIYI had a strong start to 2024. We continue to execute on our strategy of providing high-quality content and enhancing our user experience. As a result, we saw significant growth in our membership base and overall revenue.
In the first quarter, our total revenue reached $1.5 billion, an increase of 12% year-over-year.
Our membership revenue grew by 15% year-over-year to $850 million, driven by the strong performance of our original content. We added 10 million new members in the quarter, bringing our total membership base to 120 million.
We also saw strong growth in our advertising revenue, which increased by 9% year-over-year to $650 million. This growth was driven by the success of our new advertising products and the increase in our audience size.
Overall, we had a very strong quarter. We are confident in our ability to continue to grow our business in the years to come.
Now, I will turn the call over to our CFO, Wang Xiaohui, to provide more details on our financial results.
Wang Xiaohui:
Thank you, Gong Yu.
Our non-IFRS net income in the first quarter was $200 million, compared to $150 million in the same period last year. Our non-IFRS net margin was 13%, up from 10% in Q1 2023.
We generated $300 million in operating cash flow in the quarter, compared to $200 million in the same period last year. Our strong cash flow generation allows us to invest in our content and technology.
We ended the quarter with $2.5 billion in cash and cash equivalents.
I will now provide some guidance for the second quarter of 2024. We expect our total revenue to be in the range of $1.55 billion to $1.6 billion, representing a growth of 10% to 12% year-over-year.
We expect our non-IFRS net income to be in the range of $210 million to $220 million, representing a growth of 14% to 18% year-over-year.
We are confident in our ability to achieve our guidance for the second quarter and for the full year of 2024.
Thank you. I will now turn the call over to our COO, Wang Xiaoyan, to provide more details on our operations.
Wang Xiaoyan:
Thank you, Wang Xiaohui.
In the first quarter, we continued to invest in our content. We released a number of popular original dramas and variety shows, including The Knockout and Youth With You 4. These shows were well-received by our members and helped to drive growth in our membership base.
We also made significant progress in enhancing our user experience. We launched a new user interface for our app, which makes it easier for our members to find and watch their favorite content. We also launched a new recommendation engine, which helps us to personalize the content experience for each of our members.
In addition, we continued to expand our international presence. We launched our service in several new countries in Southeast Asia and Latin America. We are confident that we can continue to grow our international business in the years to come.
Overall, we had a very strong quarter from an operational perspective. We are confident in our ability to continue to grow our business in the years to come.
Thank you. That concludes our prepared remarks. We will now open the call for questions.
Q&A Session
Analyst: Thank you for the update. I have a question about your content strategy. Can you provide more details on the types of content that you are investing in?
Gong Yu: We are investing in a wide range of content, including dramas, variety shows, movies, and documentaries. We are focused on producing high-quality content that appeals to a broad audience. We believe that our content strategy is a key differentiator for us in the market.
Analyst: Thank you. I have another question about your international expansion plans. Can you provide more details on your strategy for growing your international business?
Wang Xiaoyan: We are focused on expanding our international presence by launching our service in new markets and by partnering with local content providers. We believe that there is a great opportunity for us to grow our international business in the years to come.
Analyst: Thank you. I have one last question about your financial guidance. Can you provide more details on the assumptions that you have made in setting your guidance?
Wang Xiaohui: Our guidance is based on our current expectations for the market and our business. We believe that we are well-positioned to achieve our guidance for the second quarter and for the full year of 2024.
Operator: That concludes our question-and-answer session. I would like to turn the call back over to our CEO, Gong Yu, for closing remarks.
Gong Yu:
Thank you for joining us today. We are confident in our ability to continue to grow our business in the years to come. We appreciate your continued support.
Kind regards,
S. Sing
