BEIJING - Chinese streaming platform iQIYI, Inc. (NASDAQ:IQ) reported third-quarter earnings that beat analyst estimates, but saw revenue decline year-over-year, sending shares down 4% in premarket trading Thursday.
The company reported adjusted earnings per ADS of RMB0.50 ($0.07), surpassing the analyst consensus of RMB0.39. However, revenue fell 10% YoY to RMB7.25 billion ($1.0 billion), in line with estimates.
Membership services revenue, iQIYI's largest segment, decreased 13% YoY to RMB4.4 billion ($622.1 million), which the company attributed to a "lighter content slate" in the quarter. Online advertising services revenue also declined 20% YoY to RMB1.3 billion ($190.5 million).
Despite the revenue declines, iQIYI maintained profitability with operating income of RMB238.9 million ($34.0 million), though this was down 68% from the same period last year. The operating margin contracted to 3% from 9% a year ago.
"We have recently elevated our entertainment offerings and services with strategic enhancements, integrating sought-after mini and short dramas to complement our extensive long-form content portfolio," said Founder and CEO Yu Gong.
The company ended the quarter with RMB4.7 billion ($673.8 million) in cash and equivalents.
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