On August 13, iqiyi released its unaudited financial report for the second quarter of 2020. According to the financial report, iqiyi’s total revenue in the second quarter of 2020 will reach 7.4 billion yuan, a year-on-year increase of 4%. The net loss was 1.4 billion yuan, which was significantly narrowed compared with the loss of 2.048 billion yuan last year.
by the end of the second quarter, iqiyi’s members had reached 105 million, and its member service revenue reached 4 billion yuan, accounting for more than half of the total revenue, with a year-on-year growth of 19%, which is still the largest business pillar of iqiyi.
according to the financial report, iqiyi’s total revenue in the second quarter of 2020 will reach 7.4 billion yuan (about US $1 billion), a year-on-year increase of 4%, and a net loss of 1.4 billion yuan, which is significantly narrowed than that of last year’s loss of 2.048 billion yuan.
by the end of the second quarter, iqiyi had 105 million subscribers. In the same period of last year, the revenue of “you” and “secret show” was more than $2.7 billion, accounting for more than $2.7 billion of revenue from the “Youth” and “entertainment corner” in the same period of last year. Iqiyi interprets the growth as the increase in the number of subscription members and the promotion of various operational measures to enhance the monetization of member business.
affected by the epidemic situation and macroeconomic environment, iqiyi online% in the second quarter. Over the same period, other revenue reached 919.9 million yuan (about US $130.1 million).
in the second quarter of 2020, iqiyi’s revenue cost was 6.8 billion yuan (about US $967.2 million), a decrease of 2% compared with the same period in 2019, mainly due to the decrease of loan cost and the exemption of cultural business construction fee in 2020, which was offset by the increase of content cost. The operating loss was RMB 1.3 billion (US $181.4 million). The operating loss rate is 17% and 26% in the same period of 2019.
in addition, as of June 30, 2020, iqiyi held a total of RMB 9.5 billion (approximately US $1.3 billion) in cash, cash equivalents, restricted cash and short-term investments.
after four months of being exposed by Wolfpack research, a US shorting agency, that overstated the number of users, revenue and inflated costs, iqiyi’s financial report disclosed that the company was under investigation by the US Securities and Futures Commission (SEC).
affected by the news, iqiyi’s share price fell by 12.36% after trading to $19, while Baidu’s share price fell by more than 7% to $115.83.
according to the information disclosed in the financial report, the SEC asked iqiyi to provide financial records from January 2018 to the present, and referred to the query report issued by Wolfpack research in April this year.
according to the report, iqiyi has overstated its revenue by 8-13 billion yuan in 2019 by exaggerating the number of its member users by 42% – 60%. In addition, the report said iqiyi exaggerated its content, other assets and the cost of the acquisition payment, hiding its fraud from auditors and investors in the form of burning counterfeit money.
previously, iqiyi has publicly responded that “its quoted data are seriously untrue in conclusion and inconsistent with the actual situation. As a responsible listed company, all financial and operational data disclosed by us are true and meet the requirements of the sec. We firmly deny all false accusations and reserve the right of legal prosecution.”
although Kwai’s report is not convincing, it has not caused much impact on Iqiyi. But it is undeniable that Iqiyi is facing the problem of high content cost and tight cash flow in long video field, and watermelon videos, B stations and jitter tiktok crowded the market.