iQIYI (NASDAQ: IQ) reported Q1 EPS of ($0.56), in-line with the analyst estimate of ($0.56). Revenue for the quarter came in at $1.1 billion versus the consensus estimate of $1.03 billion.

First Quarter 2020 Highlights

• Total revenues were RMB7.6 billion (US$1.1 billion[1]), representing a 9% increase from the same period in 2019.
• Operating loss was RMB2.2 billion (US$316.6 million) and operating loss margin was 29%, compared to operating loss of RMB2.0 billion and operating loss margin of 29% in the same period in 2019.
• Net loss attributable to iQIYI was RMB2.9 billion (US$406.0 million), compared to net loss attributable to iQIYI of RMB1.8 billion in the same period in 2019. Diluted net loss attributable to iQIYI per ADS was RMB3.92 (US$0.56), compared to diluted net loss attributable to iQIYI per ADS of RMB2.52 in the same period of 2019.
• The number of total subscribing members was 118.9 million as of March 31, 2020, 99.2% of whom were paying subscribing members. This compares to 96.8 million of total subscribing members as of March 31, 2019, up 23% year over year.

"We delivered solid results during the first quarter despite very challenging environment caused by the COVID-19 outbreak," commented Dr. Yu Gong, Founder, Director, and Chief Executive Officer of iQIYI. "Total revenues increased 9% year-over-year while user time spent and number of subscribers both achieved robust growth, with subscribers reaching 119 million, an increase of 23% year-over-year and a net addition of 12 million from previous quarter. The growth was driven by our strong content offerings and audience's surging demand for digital entertainment when sheltering in place amid the outbreak of COVID-19, while our content cost continued to see moderate increase compared to a year ago. We celebrated our 10-year anniversary last month and look forward to further building out our comprehensive content library and ecosystem, capitalizing on the deep value of our original IPs and diversifying our monetization streams in the decade ahead."

"We started off the year with solid financial and operational performance spearheaded by our membership business," commented Mr. Xiaodong Wang, Chief Financial Officer of iQIYI. "We continued to optimize our membership system and offer premium services in addition to achieving strong net addition of subscribers during the first quarter. We are also encouraged by the progress we have been making in building a more balanced content mix, expanding our monetization initiatives and exploring technology innovations that drive efficiency. With the vast market potential of China's digital entertainment market and the rationalizing content production industry, we believe we are well positioned to navigate through the pandemic and macro headwinds, and achieve long-term sustainable growth."

GUIDANCE:

iQIYI sees Q2 2020 revenue of $1.02-1.08 billion, versus the consensus of $1.08 billion.

For the second quarter of 2020, iQIYI expects total net revenues to be between RMB7.25 billion (US$1.02 billion) and RMB7.67 billion (US$1.08 billion), representing a 2% to 8% increase from the same period in 2019. This forecast reflects iQIYI's current and preliminary view, which is subject to substantial uncertainty.

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