IQiyi posts $18.7m loss as revenue declines

iQiyi reported an 11% year-on-year drop in revenue to RMB6.6 billion (US$925.3 million) for Q2 2025, alongside an operating loss of RMB46.2 million (US$6.4 million).

The Beijing-based online video platform saw membership services revenue fall 9% to RMB4.1 billion (US$574 million) and online ad revenue drop 13% to RMB1.3 billion (US$182 million).

Content distribution revenue declined 37% to RMB436.6 million (US$61.1 million), while other revenues rose 6% to RMB829.3 million (US$116.1 million).

Net loss attributable to iQIYI was RMB133.7 million (US$18.7 million), compared to net income of RMB68.7 million (US$9.6 million) in Q2 2024.

Non-GAAP net income attributable to iQIYI was RMB14.7 million (US$2.0 million), down from RMB246.9 million (US$34.6 million) a year earlier.

The company ended the quarter with RMB5.1 billion (US$705.7 million) in cash, cash equivalents, restricted cash, short-term investments, and long-term restricted cash included in prepayments and other assets.

🔗 Source: iQiyi

🧠 Food for thought

1️⃣ Content investment cuts can trigger disproportionate revenue declines in streaming

iQIYI’s Q2 2025 results demonstrate how reducing content spending can backfire in the competitive streaming market.

The company cut content costs by 8% year-over-year to RMB3.78 billion, citing a “lighter content slate” as the primary strategy 1.

However, this cost reduction triggered much larger revenue declines across core business segments. Membership services dropped 9%, and online advertising fell 13% year-over-year 1.

The company’s operating income fell from RMB342.1 million in Q2 2024 to an operating loss of RMB46.2 million in Q2 2025, showing that the revenue impact far exceeded the cost savings 1.

This highlights a significant challenge in streaming economics: content serves as both the primary cost driver and the key revenue generator, making aggressive cost-cutting a risky strategy that can erode the subscriber base and advertiser appeal simultaneously.

2️⃣ Micro-content formats emerge as a cost-effective alternative to traditional long-form programming

iQIYI’s strategic pivot toward micro-dramas represents a broader industry shift toward shorter, more cost-effective content formats.