On May 18, 2021, iqiyi (NASDAQ: IQ) released its unaudited financial results for the first quarter ended March 31, 2021. Iqiyi's total revenue grew faster than expected in the first quarter of 2021, reaching 8 billion yuan ($1.2 billion), according to the financial report. By the end of the first quarter, iqiyi's subscription membership had reached 105.3 million.
"We started with a comprehensive and solid quarterly performance." Gong Yu, founder, director and CEO of iqiyi, said: "our subscription members increased by 3.6 million in the first quarter, and our member service revenue increased by 12% month-on-month, reaching the highest level since last year in absolute terms. The remarkable growth is largely due to the wide range of dramas, variety shows and movies we launched this quarter. In particular, the series "son-in-law" has become another benchmark in terms of ratings and monetization efficiency, which also confirms our exclusive content strategy. On April 22, we celebrated the 11th anniversary of the company. The fierce competition over the years has given us more confidence to further strengthen our leadership position. We firmly believe that long video as a form of entertainment is irreplaceable, and we are fully prepared to deal with future opportunities and challenges. "
"Total revenue in the first quarter exceeded our expectations, with healthy growth both month-on-month and year-on-year." Mr. Wang Xiaodong, Chief Financial Officer of iqiyi, said: "in this quarter, we launched a number of popular content, while improved investment efficiency contributed to a year-on-year decline in content costs for the third consecutive quarter. We will, as always, aim at profitability and drive the development of different businesses, including content, technology and marketing. This is an escort for iqiyi's sustainable long-term development.
In the first quarter of 2021, iqiyi's member service income was 4.3 billion yuan ($658.1 million), an increase of 12% month-on-month. In this quarter, iqiyi's membership achieved a net growth of 3.6 million. This is mainly due to the high-quality content, especially the strong superimposed holiday impact of the high-quality drama content, which continues to drive the increase in the number of members. Advertising revenue reached 1.9 billion yuan ($292.5 million) in the first quarter, up 25% from a year earlier, thanks to a macroeconomic recovery that led to a rebound in brand advertising budgets and the number of brand advertisers. In addition to membership and advertising revenue, iqiyi's content distribution revenue reached 779.1 million yuan ($118.9 million) in the quarter, up 29% from a year earlier, because iqiyi released more content to other platforms in the quarter. Other revenue contributed 961 million yuan ($146.7 million) in the first quarter, up 10% from the same period last year.
In the first quarter of 2021, iqiyi's revenue cost fell by 10% compared with the same period in 2020, mainly due to the decline in content cost and bandwidth cost. Of this total, the cost of content in the first quarter was 5.4 billion yuan ($829.6 million), down 8 per cent compared with the same period in 2020. The decrease in the cost of content is mainly due to the decrease in the cost of copyrighted content.
Iqiyi made an operating loss of 1 billion yuan ($154.8 million) in the first quarter, reducing the operating loss rate to 13% from 29% in 2020.
As of March 31, 2021, the company has cash, cash equivalents, restricted-use cash and short-term investments totaling 13.3 billion yuan ($2 billion).
Iqiyi looks forward to results for the second quarter of 2021: total revenue is expected to be between 7.21 billion yuan ($1.1 billion) and 7.65 billion yuan ($1.17 billion). (the outlook only represents a preliminary forecast based on the current situation and does not rule out the possibility of future adjustments.)