iQIYI (IQ) Tops Q4 EPS by 1c, Revenues Beat; Offers Q1 Revenue Outlook Above Consensus

iQIYI (NASDAQ: IQ) reported Q4 EPS of ($0.70), $0.01 better than the analyst estimate of ($0.71). Revenue for the quarter came in at $1 billion versus the consensus estimate of $982.96 million.

Fourth Quarter 2018 Highlights

• Total revenues were RMB7.0 billion (US$1.0 billion1), representing a 55%2 increase from the same period in 2017.
• Operating loss was RMB3.3 billion (US$483.5 million) and operating loss margin was 47%, compared to operating loss of RMB856.1 million and operating loss margin of 19% in the same period in 2017.
• Net loss attributable to iQIYI was RMB3.5 billion (US$505.7 million), compared to net loss attributable to iQIYI of RMB612.4 million in the same period in 2017. Diluted net loss attributable to iQIYI per ADS was RMB4.83 (US$0.70).
• The number of total subscribing members was 87.4 million as of December 31, 2018, 98.5% of whom were paying subscribing members. This compares to 50.8 million of total subscribing members as of December 31, 2017, up 72% year over year.
• “We delivered another quarter of solid growth and closed out the year on a strong footing with over 87 million total subscribing members,” commented Dr. Yu Gong, Founder, Director and Chief Executive Officer of iQIYI. “As we enter 2019, we are confident in generating growth across the board, led by membership services which has demonstrated continued momentum. We maintain our strategic focus on producing original premium content, and will continue to advance our technology innovation and nurture our ecosystem to fully leverage the tremendous IP value in our content. With an exciting new year ahead, we look forward to further strengthening our platform and continuing our journey to become a technology-based entertainment giant. ”

“We are pleased to report strong top-line growth for fiscal year 2018 with total revenues increasing 52% year-over-year to RMB25 billion,” commented Mr. Xiaodong Wang, Chief Financial Officer of iQIYI. “Membership business continued to be the main engine driving our growth, while we further broadened and diversified other revenue streams. 2018 was also a transition year for us, as we devoted more resources towards producing original content which added pressure to our margins. We believe our investment in premium content will prove to be very rewarding and help better position the Company for long-term growth.”

GUIDANCE:

iQIYI sees Q1 2019 revenue of $989.6-1000 million, versus the consensus of $972.94 million.

For earnings history and earnings-related data on iQIYI (IQ) click here.

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