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No. of Recommendations: 19
Total revenues reached RMB4.9 billion (US$777.6 million), representing a 57% increase from the same period in 2017.

Membership services revenue was RMB2.1 billion (US$334.0 million), representing a 67% increase from the same period in 2017. The increase was primarily driven by a series of premium original content titles released in the first quarter of 2018 as well as various initiatives we rolled out during the Chinese New Year holiday.

Online advertising services revenue was RMB2.1 billion (US$336.5 million), representing a 52% increase from the same period in 2017. The increase was primarily due to our improved efficiency in the monetization of brand advertising business, driven by our strong and expanding library of self-produced content, as well as the robust growth of our in-feed advertising business.

Content distribution revenue was RMB266.7 million (US$42.5 million), representing a 44% increase from the same period in 2017. The increase was primarily due to several major drama series titles that we sub-licensed to external partners in the first quarter of 2018.

Other revenues were RMB405.0 million (US$64.6 million), representing a 51% increase from the same period in 2017. The increase was primarily driven by strong performance across various other business lines in the first quarter of 2018.

Cost of revenues was RMB4.8 billion (US$772.9 million), representing a 44% increase from RMB3.4 billion after deducting the value added tax in the same period in 2017. The increase was primarily driven by content costs due to higher amortization of licensed copyrights and produced content, which was in turn caused by our increased investment in content offerings.

Content costs as a component of cost of revenues were RMB3.9 billion (US$617.0 million), representing a 54% increase from the same period in 2017.

Selling, general and administrative expenses were RMB704.2 million (US$112.3 million), representing a 42% increase from the same period in 2017. The increase was primarily due to increased channel and marketing expenses associated with the pre-installation of iQIYI’s app, as well as brand and content promotional expenses.

Research and development expenses were RMB387.3 million (US$61.7 million), representing a 44% increase from the same period in 2017, primarily due to increased headcount in research and development.

Operating loss was RMB1.1 billion (US$169.4 million), compared to operating loss of RMB1.0 billion in the same period in 2017. Operating loss margin was 22%, compared to operating loss margin of 34% in the same period in 2017.

Total other income was RMB666.2 million (US$106.2 million), compared to total other expenses of RMB79.1 million during the same period of 2017. In the first quarter of 2018, we recognized RMB186.6 million (US$29.7 million) of fair value gain arising from one of our private company investments in accordance with the new financial instruments accounting standard adopted on January 1, 2018 and RMB474.2 million (US$75.6 million) of foreign exchange gain arising from the appreciation of the Renminbi against the U.S. dollar.

Loss before income taxes was RMB396.2 million (US$63.2 million), compared to RMB1.1 billion in the same period in 2017.
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