IQIYI Inc (NASDAQ: IQ) stock lost over 6.4% on 17th May, 2019 (As of 12:06 pm GMT-4; Source: Gogole finance) as the company’s net loss attributable to iQiyi widened to RMB 1.8 billion ($270.3 million), from RMB 395.7 million in the same period last year. Higher costs of producing original content weighed on the bottom line. During the first quarter, average DAU of mobile app and the total user time spent both achieved double digit growth year-over-year. iQIYI continued to rank number one among online video platforms in China, in terms of mobile DAU and total time spent of having to search tracking data of higher search
IQ in the first quarter of FY 19 has reported the adjusted loss per share of 35 cents, beating the analysts’ estimates for the adjusted loss per share of 52 cents. The company had reported the adjusted revenue growth of 43 percent to $1 billion in the first quarter of FY 19, missing the analysts’ estimates for revenue of $1.03 billion. The revenue grew due to 58% increase in subscriber base. At the end of the first quarter, iQiyi had 96.8 million subscribers, of which over 98.6% were paying members. This was mainly attributable to the premium content and targeted marketing campaigns. In terms of premium content, IQ hadreleased several high quality original drama during the quarter such as the House of Holland, The Golden Eyes, The Legend, all of which quickly drove subscribers’ growth. Licensed dramas such as The story of Minglan also contributed to subscribers conversion.
Moreover, Membership service revenue was RMB3.4 billion, up 64% year-over-year. This was driven by strong growth in the number of subscribers, which reached 96.8 million at the end of the first quarter. Online advertising service revenue was RMB2.1 billion, flat year-over-year due to macro softness and the slower than expected recovery of our in-feed advertising. Content distribution revenue was RMB442.6 million, up 66% year-over-year. This increase was driven by a number of premium content titles we distributed. During the first quarter, the other business continued to gain momentum with revenues growing 143% year-over-year. This demonstrates the success the company have had in diversifying the revenue stream, and in building multiple engines for the company. The growth was broad based and to a large extent, driven by the gaming business, which performed better than expected.
For the second quarter, iQIYI expects total net revenues to be between RMB 6.91 billion ($1.0 billion) and RMB 7.29 billion ($1.1 billion), representing a 12-18% increase from the same period in 2018.